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Released September 25, 2019 | GALWAY, IRELAND
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GALWAY, IRELAND--September 25, 2019--Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Three quarters of the largest gas pipeline project in Europe, Nord Stream 2, is complete, but the project is fast approaching a number of costly roadblocks that could hold up its completion.
Nord Stream 2, the development company fronting the Russian-led project, confirmed that 1,855 kilometres (km) of the twin pipeline has been laid in the Baltic Sea in Russian, Finnish, Swedish and German waters. However, Denmark continues to refuse permission for the pipeline to cross its territorial waters and the captain of the pipe-laying ship Solitaire has confirmed that it will reach Danish waters in a few weeks but with no permission in place. While the developers have claimed that the project will be complete on time in spring 2020, it has admitted that the Danish delay could delay completion by up to eight months and cost an additional 660 million euro ($731 million). In July, the pipeline developer claimed that the project was beyond the point of no return. For additional information, see July 15, 2019, article - Nord Stream 2 Pipeline is 'Past Point of No Return'.
Russia's oil and gas major Gazprom (PINK:OGAZPY) (Moscow), holds a 50% stake in the 9.5 billion-euro ($11.6 billion) pipeline, and the rest is owned by five European Union (EU) shareholders including Royal Dutch Shell plc (NYSE:RDS.A) (The Hague, Netherlands), OMV AG (OTC:OMVKY) (Vienna, Austria), BASF/Wintershall (Ludwigshafen, Germany) and ENGIE (EPA:GSZ) (Paris, France). Nord Stream 2 is a 1,230-kilometre pipeline system that will transport natural gas under the Baltic Sea from Russia to Germany and to the wider EU. Its twin pipelines will have a total capacity of 55 billion cubic metres (Bcm), doubling the capacity of the existing Nord Stream strings.
Speaking earlier this month in Vienna, Rainer Seele, chief executive of OMV, one of pipeline's investors, said Danish approval is needed for completion. "The Nord Stream 2 company has clearly informed us that it is sticking to the schedule and the budget, and we have no reason to revise the plan in any way today. What will be decisive is when the Danish authorities make their decision, and what decision they will make."
Last week the project was hit by a decision by the EU General Court to restrict the transit of Russian gas via the onshore Opal pipeline, which runs through Germany. The EU court overruled a European Commission decision from 2016 to exempt the Opal pipeline from EU rules that are designed to preventing dominance of the supply system. Poland had challenged the exemption on grounds that it threatened its gas security. Opal already carries gas from the original Nord Stream pipeline, running 480 kilometres parallel to the German-Polish border. Gazprom had been granted access to 80% of its capacity, but the ruling cuts this to 35% and Gazprom will be forced to look for alternatives. Nord Stream 2 also would have used Opal. The ruling was claimed as a victory by Poland and Ukraine, which are transit countries for Russian gas and against the Nord Stream 2 project.
"The ruling keeps Poland's and Ukraine's energy security at a high level," said Polish Energy Minister Krzysztof Tchorzewski. Yuriy Vitrenko, executive director of Ukraine's state-run Naftogaz oil and gas company, referred to the ruling as "a pleasant surprise. I hope that all this is a sign of gradual change in Europe's attitude to Gazprom and Russia's use of gas as an instrument of political influence."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Our European headquarters are located in Galway, Ireland. Follow IIR Europe on: Facebook - Twitter - LinkedIn For more information on our European coverage send inquiries to info@industrialinfo.eu or visit us online at Industrial Info Europe.
Nord Stream 2, the development company fronting the Russian-led project, confirmed that 1,855 kilometres (km) of the twin pipeline has been laid in the Baltic Sea in Russian, Finnish, Swedish and German waters. However, Denmark continues to refuse permission for the pipeline to cross its territorial waters and the captain of the pipe-laying ship Solitaire has confirmed that it will reach Danish waters in a few weeks but with no permission in place. While the developers have claimed that the project will be complete on time in spring 2020, it has admitted that the Danish delay could delay completion by up to eight months and cost an additional 660 million euro ($731 million). In July, the pipeline developer claimed that the project was beyond the point of no return. For additional information, see July 15, 2019, article - Nord Stream 2 Pipeline is 'Past Point of No Return'.
Russia's oil and gas major Gazprom (PINK:OGAZPY) (Moscow), holds a 50% stake in the 9.5 billion-euro ($11.6 billion) pipeline, and the rest is owned by five European Union (EU) shareholders including Royal Dutch Shell plc (NYSE:RDS.A) (The Hague, Netherlands), OMV AG (OTC:OMVKY) (Vienna, Austria), BASF/Wintershall (Ludwigshafen, Germany) and ENGIE (EPA:GSZ) (Paris, France). Nord Stream 2 is a 1,230-kilometre pipeline system that will transport natural gas under the Baltic Sea from Russia to Germany and to the wider EU. Its twin pipelines will have a total capacity of 55 billion cubic metres (Bcm), doubling the capacity of the existing Nord Stream strings.
Speaking earlier this month in Vienna, Rainer Seele, chief executive of OMV, one of pipeline's investors, said Danish approval is needed for completion. "The Nord Stream 2 company has clearly informed us that it is sticking to the schedule and the budget, and we have no reason to revise the plan in any way today. What will be decisive is when the Danish authorities make their decision, and what decision they will make."
Last week the project was hit by a decision by the EU General Court to restrict the transit of Russian gas via the onshore Opal pipeline, which runs through Germany. The EU court overruled a European Commission decision from 2016 to exempt the Opal pipeline from EU rules that are designed to preventing dominance of the supply system. Poland had challenged the exemption on grounds that it threatened its gas security. Opal already carries gas from the original Nord Stream pipeline, running 480 kilometres parallel to the German-Polish border. Gazprom had been granted access to 80% of its capacity, but the ruling cuts this to 35% and Gazprom will be forced to look for alternatives. Nord Stream 2 also would have used Opal. The ruling was claimed as a victory by Poland and Ukraine, which are transit countries for Russian gas and against the Nord Stream 2 project.
"The ruling keeps Poland's and Ukraine's energy security at a high level," said Polish Energy Minister Krzysztof Tchorzewski. Yuriy Vitrenko, executive director of Ukraine's state-run Naftogaz oil and gas company, referred to the ruling as "a pleasant surprise. I hope that all this is a sign of gradual change in Europe's attitude to Gazprom and Russia's use of gas as an instrument of political influence."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Our European headquarters are located in Galway, Ireland. Follow IIR Europe on: Facebook - Twitter - LinkedIn For more information on our European coverage send inquiries to info@industrialinfo.eu or visit us online at Industrial Info Europe.
