Nord Stream

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This article or section contains information about a planned or expected pipeline. It may contain information of a speculative nature and the content may change dramatically as the construction and/or completion of the pipeline approaches, and more information becomes available.

Nord Stream (former names: North Transgas and North European Gas Pipeline) is a planned natural gas pipeline from Russia to Germany. The name of Nord Stream refers usually to the offshore section of this pipeline between Vyborg and Greifswald, but sometimes it may have wider meaning, which includes onshore section in Russia and futher connections in the Western-Europe.

Contents 1 Technical features 1.1 Russian onshore section 1.2 Baltic Sea offshore section 1.3 Western European part 2 Natural gas supply sources 3 Contracts to supply gas through the Nord Stream 4 Environmental impact assessment 5 History 6 Controversy 6.1 Political aspects 6.2 Economical aspects 6.3 Environmental aspects 7 German political scandal 8 See also 9 References 10 External links

[edit] Technical features

[edit] Russian onshore section

Construction of the Russian onshore section began on 9 December 2005 in the town of Babayevo (Vologda Oblast), and is slated for completion in 2010. The onshore section in Russia will run from Gryazovets to the coastal compressor station at Vyborg. The length of this section will be 917 km long, diameter of the pipe is 1,420 mm and a working pressure will be 100 atm, which will be secured by six compressor stations. Russian onshore section will supply gas also to the Northwestern region of Russia (St. Petersburg and Leningrad Oblast). It will be constructed and operated by Gazprom.

[edit] Baltic Sea offshore section

The offshore section of pipeline will run from Vyborg compressor station at Portovaya Bay along the bottom of the Baltic Sea towards Greifswald in Germany, with a total length of 1,196 km. 22 km will run in the Russian territorial waters, 96 km in the Russian economic zone, 369 km in the Finnish economic zone, 482 km in the Swedish economic zone, 149 km in the Danish economic zone, 33 km in the German economic zone and 33 km in the German territorial waters. The plan is to build two parallel gas pipeline legs each with capacity 27.5 bcm per year. According to plan, the first leg will be built in 2008-2010 and second one in 2010-2012. The diameter of pipe will be 1,220 millimetres (48 inches), wall thickness 38 millimeters and the working pressure 220 bar. There will be one service platform in the Swedish economic zone, 90 km to north-east of Gotland island. The pipeline's offshore section is expected to cost around 6 billion Euro, and is being built and operated by Nord Stream AG, a joint company of Russian Gazprom (51% of shares), German BASF and E.ON (both 24.5%).^[1]

[edit] Western European part

The Western European part of the pipeline project includes two transmission pipelines in Germany. The southern pipeline (OPAL pipeline) will run from Greifswald to Olbernhau near German-Czech border. It will connect Nord Stream with JAGAL (connected to the Yamal-Europe pipeline), and STEGAL (connected to the Russian gas transport route via Czech and Slovak republics) pipelines. The western pipeline (NEL pipeline) will run from Greifswald to Achim, where it will be connected with the Rehden-Hamburg gas pipeline. Together with the MIDAL pipeline it will create Greifswald-Bunde connection. The further gas delivery to the UK will be made through the planned connection between Bunde and Den Helder, and from there through the offshore interconnector Balgzand – Bacton (BBL Pipeline).

[edit] Natural gas supply sources

The main source of natural gas for the Nord Stream pipeline will be Yuzhno-Russkoye field, which locates in the Krasnoselkupsky District, Yamal-Nenets Autonomous Okrug, Tyumen Oblast. The licence for the Yuzhno-Russkoye field is owned by Severneftegazprom, the subsidiary of Gazprom. BASF and E.ON are minor shareholders in Severneftegazprom. The proven reserves of Yuzhno-Russkoye are 700 bcm and estimations are more than 1000 bcm of natural gas. The planned capacity of Yuzhno-Russkoye is about 25 bcm of gas per year.

Nord Stream will be fed additionally from fields in Yamal Peninsula, Ob-Taz bay. Gazprom has also indicated that the majority of gas produced at the Shtokman field would be sold to Europe via the Nord Stream pipeline. For this purpose, the pipeline from the Shtokman field via Kola peninsula to Volkhov and/or Vyborg in the Leningrad Oblast has to be built.^[2]

[edit] Contracts to supply gas through the Nord Stream

On 13 October 2005 Gazprom's export arm Gazexport signed a contract with German gas company Wingas, the joint venture of Gazprom and Wintershall (subsidiary of BASF), to supply 9 bmc of natural gas annually during 25 years from the pipeline's launch in 2010.

On 16 June 2006 Gazprom and Danish DONG Energy signed a contract for 20 years on delivery of 1 bcm Russian gas annually to Denmark with an option of increase in the annual quantities. Under the agreement, Gazprom will start supplying gas in 2011. In addition, DONG Energy will start supplying 0.6 bcm natural gas annually to a Gazprom subsidiary Gazprom Marketing and Trading (UK).

On 29 August 2006 Gazprom and E.ON Ruhrgas signed an agreement to extend current contracts on natural gas supplies and have signed a contract for additional 4 bcm of annual gas supply through the Nord Stream pipeline.

[edit] Environmental impact assessment

The Nord Stream pipeline construction is a subject to the environmental impact assessment in accordance with the Espoo Convention and national legislation of concerned countries, and HELCOM recommendations.

According to the Nord Stream AG, the submission of a notification of environmental impact assessment is planned in mid-November 2006. The official notification of the project should be sent to Russia, Finland, Sweden, Denmark and Germany, as parties of origin (the countries whose exclusive economic zones and/or territorial waters the pipeline is planned to pass through), as well as to Poland, Latvia, Lithuania, and Estonia as affected parties. Nord Stream AG wants the work on the environmental impact assessment report to be finished by mid-2007 and would like to get the final environmental impact assessment approval at the beginning of 2008.^[3]

[edit] History

The project started in 1997 when Gazprom and Finnish company Neste (later Fortum) formed joint company North Transgas Oy for construction and operation of the gas pipeline from Russia to Northern Germany across the Baltic Sea. The German partner of this project was Ruhrgas (later E.ON). In April 2001, Gazprom, Fortum, Ruhrgas and Wintershall adopted a statement on joint feasibility study of pipeline. On 18 November 2002, the Management Committee of Gazprom approved a a schedule of project implementation. In May 2005, Fortum withdraw from the project and sold its 50% stake in North Transgas to Gazprom. As a result, Gazprom became a 100% owner of North Transgas Oy. On 8 September 2005, Gazprom, BASF and E.ON signed a basic agreement on the construction of the North European Gas Pipeline. On 30 November 2005, the North European Gas Pipeline Company (later Nord Stream) was incorporated in Zug, Switzerland. On 9 December 2005, Gazprom launched construction of Russian onshore section of pipeline. On 30 March 2006, shareholders’ committee of the North European Gas Pipeline Company hold its first meeting. On 4 October 2006, the pipeline and the operating company were officially renamed to Nord Stream.

[edit] Controversy

The pipeline has drawn criticism internationally, most strongly from Poland, Sweden, the Baltic countries, the United States and some environmental organizations (e.g. WWF).^{[4] [5]}

[edit] Political aspects

The pipeline is seen as a political move by Russia to bypass transit countries (currently Ukraine, Slovakia, Czech Republic, Belarus, Poland).^[6] Some transit countries are concerned that a long term plan of the Kremlin is to attempt exerting political influence on them by threatening their gas supply, similarly to the Russia-Ukraine gas dispute in January 2006. The risk of compromising gas supplies to Western Europe is considered an offset to such a threat, but upon completion of the Nord Stream this offset will be significantly lessened.

Also the dependence upon any single gas supplier has been considered undesirable across Europe, and the new pipeline is seen as a factor in further increasing Europe's dependence on Russian gas.^[7]

More political concerns raised while Russian president Vladimir Putin stated that the ecological safety of the pipeline project will be ensured by using the Baltic Fleet of Russian Navy.^[8]

The Russian response has been that the pipeline will increase Europe’s energy security, and the criticism is caused by bitterness about the loss of potential transit revenues and political influence. According to the Gazprom, the direct connection to Germany will decrease risks in the gas transit zones, including political risk of cutting Russian gas exports to Western Europe.^[9]

Swedish military experts and several politicians, including Minister for Defence Mikael Odenberg, have stated that the pipeline can cause "a security policy problem" for Sweden and warnings has been raised for Russian espionage and military friction. Mikael Odenberg said that "We get a pipeline that motivates Russian navy presence in our economic zone and the Russians can use this for military intelligence should they want to. Of course that is a problem". He also stated that the Swedish government has very limited possibilities to influence the project, except for the environmental aspects.^[10]

[edit] Economical aspects

Russian and German officials claim that the new pipeline will eventually lead to economic savings despite the high investment cost. The reason are non-existing transit fees, as transit countries will be bypassed. Some observers speak of one billion dollars annually which will be lost by Poland.^[11] However, some doubts have been raised, whether any savings will be gained because the maintenance costs of a submarine pipeline are significantly higher than for an overland route.

[edit] Environmental aspects

Environmental concerns have also been raised that the construction of the pipeline may disturb the seabed and dislodge toxic materials including chemical munitions dumped to the Baltic Sea during and after World War II, mines and other things on the bottom which the Baltic could not cope with since it is a particularly sensitive sea.^[12][5][13] The impact on bird and marine life in the Baltic Sea is also a concern.

The World Wide Fund for Nature (WWF) asked the Contracting Parties to the Baltic Marine Environment Protection Commission (HELCOM) to safeguard the Baltic marine habitats which could be altered by the implementation of Nord Stream project.^[14]

Russian officials call these concerns far-fetched and politically motivated by the opponents of the project, pointing at the argument that during the construction the seafloor will be cleaned, rather than endangered.

All these environmental concerns would be addressed in the process of environmental impact assessment.

[edit] German political scandal

The former Chancellor of Germany, Gerhard Schröder and the President of Russia, Vladimir Putin, were strong advocates of the pipeline project during the negotiation phase. The agreement to build the pipeline was signed two weeks before the German parliamentary election. On 24 October 2005, just a few weeks before Schröder stepped down as a Chancellor, the German government guaranteed a credit of 1 billion euros for the Nord Stream pipeline project.^[15] Soon after leaving the post of Chancellor of Germany, Gerhard Schröder agreed to head the shareholders’ committee of the Nord Stream AG, the consortium which is to build the pipeline.

This has been widely decried by German and international media as a scandalous conflict of interest ^[16][17]. The accusation being that the pipeline project may have been pushed through for personal gain rather than for improving gas supplies to Germany. Information about the German government's guarantee was requested by the European Commission.^[18]

International media made also allutions to the past relations of the Managing Director of Nord Stream AG Matthias Warnig and the Russian President Vladimir Putin.^[19]

[edit] See also

• Gazprom
• Langeled pipeline - one of the longest sub-sea pipelines, connecting Norway with Great Britain
• Yamal-Europe pipeline
• Russia-Ukraine gas dispute of 2005
• Economy of Germany
• Economy of Russia

[edit] References

[edit] External links

• Nord Stream official website (English; Russian; German)
• Sweden and the NEGP: A Pilot Study of the North European Gas Pipeline and Sweden’s Dependence on Russian Energy, Base data report by Robert L. Larsson. June 2006