Nord Stream

Nord Stream

Map of Nord Stream
Location
Country Russia, Germany
General direction east–west–south
From Vyborg, Russia
Passes through Baltic Sea
To Greifswald, Germany
General information
Type natural gas
Partners Gazprom, E.ON, Wintershall, Gasunie
Operator Nord Stream AG
Contractors Saipem, Rambøll, Environmental Resource Management, Marin Mätteknik, IfAÖ, PeterGaz, DOF Subsea, Intec Engineering, Royal Boskalis Westminster, EUROPIPE, OMK, Sumitomo, EUPEC PipeCoatings, Rolls-Royce plc, Dresser-Rand Group, Siirtec Nigi SPA
Expected 2012
Technical information
Length 1,222 km (759 mi)
Maximum discharge 55 billion cubic metres per year
Diameter 1,220 mm (48 in)
Number of compressor stations 1
Compressor stations Vyborg

Nord Stream (former names: North Transgas and North European Gas Pipeline; also known as the Russo–German gas pipeline, the Baltic Sea gas pipeline, Russian: Северный поток (Severnyy potok), German: Nordeuropäische Gasleitung) is a planned natural gas offshore pipeline from Vyborg in Russia to Greifswald in Germany by the company Nord Stream AG. The name occasionally has a wider meaning, including the feeding onshore pipeline in Russia, and further connections in Western Europe.

The project, which was promoted by Russia and agreed by Gerhard Schröder's Germany, is seen as controversial for various reasons, including increasing European energy dependence on Russia and potential environmental damage.

The plan for the offshore pipeline is to build two parallel legs each with capacity of 27.5 billion cubic metres (bcm; km³) per year. The diameter of the pipe will be 1,220 millimetres (48 in) and the working pressure 22 MPa (220 bar). The first leg of the pipeline is to be built in 2010–2011 and the second one in 2011–2012. The first gas delivery is scheduled for late 2011. When finished, it will be the longest sub-sea pipeline in the world.

Contents

History

The original pipeline project started in 1997 when Gazprom and the Finnish company Neste (in 1998 merged with Imatran voima to form Fortum, and 2004 separated again) formed the joint company North Transgas Oy for construction and operation of a gas pipeline from Russia to Northern Germany across the Baltic Sea.[1] North Transgas cooperated with the German gas company Ruhrgas (later E.ON). A route survey in the Exclusive Economic Zones of Finland, Sweden, Denmark and Germany, and a feasibility study of the pipeline was conducted in 1998. Several routes were considered including routes with onshore segments through Finland and Sweden.[2][3]

On 24 April 2001, Gazprom, Fortum, Ruhrgas and Wintershall adopted a statement regarding a joint feasibility study for construction of the pipeline.[4] On 18 November 2002, the Management Committee of Gazprom approved a schedule of project implementation. In May 2005, Fortum withdrew from the project and sold its stake in North Transgas to Gazprom. As a result, Gazprom became the only shareholder of North Transgas Oy.[1][5]

On 8 September 2005, Gazprom, BASF and E.ON signed a basic agreement on the construction of a North European Gas Pipeline. On 30 November 2005, the North European Gas Pipeline Company (later named Nord Stream AG) was incorporated in Zug, Switzerland. On 9 December 2005, Gazprom started construction of the Russian onshore feeding pipeline. On 4 October 2006, the pipeline and the operating company were officially renamed Nord Stream.[6] After establishment of Nord Stream AG, all information related to the pipeline project, including results of the seabed survey of 1998, were transferred from North Transgas to the new company, and on 2 November 2006, North Transgas was officially dissolved.[7]

The Nord Stream pipeline construction was a subject to the environmental impact assessment in accordance with the Espoo Convention, national legislation of concerned countries, and HELCOM recommendations. The procedure started on 16 November 2006 with notification 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.[8] The final report on transboundary environmental impact assessment was delivered on 9 March 2009.[9] Russia's Federal Service for Ecological, Technical and Atomic Safety (Rostekhnadzor), said on 5 April 2007 that it had found both the Russian onshore and offshore sections of the route environmentally safe.[10]

On 19 March 2007, Nord Stream AG mandated Italian company Snamprogetti, a subsidiary of Saipem, for detailed design engineering of the gas pipeline.[11] A letter of intent for construction works was signed with Saipem on 17 September 2007 and the contract was concluded on 24 June 2008.[12][13] On 25 September 2007, the pipe supply contracts were awarded to the pipe producers EUROPIPE and OMK, and on 18 February 2008, the concrete weight coating and logistics services agreement was awarded to EUPEC PipeCoatings S.A.[14][15] The supply contracts for the second the second line were awarded to OMK, Europipe and Sumitomo Heavy Industries on 22 January 2010.[16]

The agreement to take N.V. Nederlandse Gasunie to the consortium as the fourth partner, was signed on 6 November 2007.[17] On 10 June 2008, Gasunie was included in the register of shareholders.[18] In December 2008, GDF Suez confirmed its interest in taking a minority stake in the project.[19] On 30 December 2008 Rolls-Royce plc was awarded a contract to supply gas turbines driving centrifugal compressors and on 8 January 2009, Royal Boskalis Westminster was awarded a seabed dredging contract.[20][21]

On 21 December 2007, Nord Stream AG submitted application documents to the Swedish government for the pipeline construction in the Swedish Exclusive Economic Zone.[22] On 12 February 2008, the Swedish government rejected the consortium's application which it had found too incomplete to take a stance on. Sweden's Minister for the Environment Andreas Carlgren said the consortium needs to describe the environmental consequences along the entire stretch of the proposed pipeline and put forward an alternative where the pipeline is not built under the sea, and also describe the option where the gas pipeline is not built at all.[23][24] In August 2008, Nord Stream AG hired former Finnish prime minister Paavo Lipponen as a consultant to help speed up the application process in Finland and to serve as a link between Nord Stream and Finnish authorities.[25] This raised concerns about the amount of politicians being paid by Nord Stream, as Gerhard Schröder, the former chancellor of Germany, is already heading the shareholder's committee. On 20 October 2009, Nord Stream received a construction permit to build the pipeline in the Danish waters.[26] On 5 November 2009, the Swedish and Finnish authorities gave a permit to lay the pipeline in their exclusive economic zones.[27] On 22 February 2010, the Regional State Administrative Agency for Southern Finland issued the final environmental permit allowing construction of the Finnish section of the pipeline.[28][29]

On 15 January 2010 construction of the Portovaya compressor station in Vyborg near the Gulf of Finland began. [30] [31] The construction of the pipeline across the bottom of the sea is due to begin on 1 April 2010.[28][29]

On 1 March 2010, French energy company GDF Suez signed with Gazprom a memorandum of understanding to acquire 9% stake in the project.[32]

The first pipe of the pipeline was laid on 6 April 2010 in the Swedish exclusive economic zone by the Castoro Sei vessel. Construction was officially launched on 9 April 2010 at Portovaya Bay with a ceremony, which was attended by the Russian President Dmitry Medvedev.[33]

Technical features

Russian onshore pipeline

Construction of the Russian overland pipeline (Gryazovets–Vyborg gas pipeline) began on 9 December 2005 in the town of Babayevo in Vologda Oblast, and it is scheduled to be completed in 2010. This pipeline is designed, constructed, and to be operated solely by Gazprom.[34] It will be a part of the integrated gas transport network of Russia connecting existing grid in Gryazovets with the coastal compressor station at Vyborg.[35] The length of this pipeline is 917 kilometres (570 mi), the diameter of the pipe is 1,420 millimetres (56 in), and working pressure will be 100 standard atmospheres (10 MPa), which will be secured by six compressor stations. The Gryazovets-Vyborg pipeline, parallel to the branch of the Northern Lights pipeline, will also supply gas to the Northwestern region of Russia (Saint Petersburg and Leningrad Oblast).[34] According to the Finnish natural gas company Gasum, a branch pipeline in Karelia will connect the onshore section of the pipeline to Finland.[36]

Baltic Sea offshore pipeline

The Nord Stream offshore pipeline is being ordered and will be operated by Nord Stream AG, a joint company owned by Gazprom (51% of shares), BASF and E.ON (both 20%), and N.V. Nederlandse Gasunie (9%).[8][17] It will run from Vyborg compressor station at Portovaya Bay along the bottom of the Baltic Sea to Greifswald in Germany. The length of the subsea pipeline will be 1,222 kilometres (759 mi), of which 1.5 kilometres (0.93 mi) in Russian inland, 121.8 kilometres (65.8 nmi) in Russian territorial waters, 1.4 kilometres (0.8 nmi) in the Russian economic zone, 375.3 kilometres (202.6 nmi) in the Finnish economic zone, 506.4 kilometres (273.4 nmi) in the Swedish economic zone, 87.7 kilometres (47.4 nmi) in the Danish territorial waters, 49.4 kilometres (26.7 nmi) in the Danish economic zone, 31.2 kilometres (16.8 nmi) in the German economic zone, 49.9 kilometres (26.9 nmi) in German territorial waters and 0.5 kilometres (0.31 mi) in German inland.[37] The pipeline will have two parallel legs, each with capacity of 27.5 billion cubic metres of natural gas per year. Pipes will have a diameter of 1,220 millimetres (48 in), the wall thickness of 38 millimetres (1.50 in) and a working pressure of 220 bars (22 MPa).[8] The first leg to be built in 2010-2011 and the second one in 2011-2012.[13] The first gas delivery is scheduled for late 2011.[38]

Western European pipelines

The Western European part of the 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) transmission pipelines. The western pipeline (NEL pipeline) will run from Greifswald to Achim, where it will be connected with the Rehden-Hamburg gas pipeline.[39] Together with the MIDAL pipeline it will create the Greifswald–Bunde connection. Further gas delivery to the United Kingdom will be made through the planned connection between Bunde and Den Helder, and from there through the offshore interconnector Balgzand–Bacton (BBL Pipeline). Gazprom has also bought an abandoned mine (Hinrichshagen Structure) in Waren, which is planned to convert into the largest underground gas storage in Europe with capacity of 5 billion cubic metres.[40][41] However, the German regulator has agreed to grant permits for construction of NEL and OPAL pipelines only if they are constructed as a part of a natural gas transmission grid with access given to third parties — something that is opposed by Nord Stream's partners.[42] For the same reason, a similar problem faces Gazprom's plan to build a 500 million cubic metres underground gas storage facility in the Campine area, near Antwerp, which was designed to ensure Russian gas deliveries to Western Europe and was planned to be used in connection with the Nord Stream.[43]

Supply sources

The main source of natural gas for the Nord Stream pipeline will be Yuzhno-Russkoye field, which is located in the Krasnoselkupsky District, Yamal-Nenets Autonomous Okrug, Tyumen Oblast.[44][45][46] 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 or Vyborg in the Leningrad Oblast has to be built.[47]

Costs and financing

According to Gazprom, the costs of the onshore pipelines on Russian and German territory could be around €6 billion.[48] The offshore section of the project is expected to cost €8.8 billion.[49] 30% of the financing will be raised through equity provided by shareholders in proportion to their stakes in the project, while 70% will be from external financing by banks.[50]

There are two tranches.[51][52] The first tranche for a €3.9 billion includes a 3.1 billion, 16-year facility covered by export credit agencies and a €800 million, 10-year uncovered commercial loan to be serviced by earnings from the transportation contracts. A €1.6 billion is covered by French credit insures company Euler Hermes, a €1 billion by the German Untied Loan Guarantee Programme UFK, and a €500 million Italian Export Credit Agency SACE SpA. Loans to be provided by 26 commercial banks. Crédit Agricole is documentation bank and bank facility agent. Société Générale is intercreditor agent, Sace facility agent, security trustee and model bank. Commerzbank is Hermes facility agent, UniCredit is UFK facility agent, Deutsche Bank is account bank and Sumitomo Mitsui Banking Corporation is technical and environmental bank.[50][51] The financial advisers were Société Générale, Royal Bank of Scotland (ABN Amro), Dresdner Kleinwort (Commerzbank), and Unicredit.[53][54] The legal adviser to Nord Stream was White & Case and legal adviser for the lenders was Clifford Chance.[51]

Contractors

Nord Stream AG employs several contractors. The environmental impact assessment was carried out by Rambøll and Environmental Resource Management (ERM). The route and seabed surveys were conducted by Marin Mätteknik, IfAÖ and PeterGaz and DOF Subsea.[55][56]

Work preliminary to front-end engineering was done by Intec Engineering.[57] The design engineering of the subsea pipeline is being done by Snamprogetti (now part of Saipem) and the pipeline will be constructed by Saipem.[11][13] The seabed would be prepared for the laying of the pipeline by Boskalis Westminster and Tideway JV, who will move about 900,000 tonnes of rock to level and stabilize the seabed, and dredge a 23 kilometres (14 mi) trench for the pipes.[21] The pipes will be provided by EUROPIPE, OMK, and Sumitomo.[14][16] Concrete weight coating and logistics services will be provided by EUPEC PipeCoatings S.A. For the concrete weight coating new coating plants to be constructed in Mukran (Germany) and Kotka (Finland). Pipe coating was scheduled to start in Mukran in January 2009 and in Kotka in March 2009.[15] Rolls-Royce plc will supply eight industrial aeroderivative gas turbines driving centrifugal compressors for front-end gas boosting at the Vyborg (Portovaya) gas compressor station.[20] Dresser-Rand Group will supply DATUM compressors and Siirtec Nigi SPA will provide a gas treatment unit for the Portovaya station.[58][59]

For the construction period, Nord Stream AG is planning to create a logistic center in Gotland. For this purpose Nord Stream AG is ready to finance the reconstruction of the Slite harbor for using it as the main interim stock yard. Other interim stock yards to be located in Mukran, in Kotka, in Hanko (Finland) and in Karlshamn (Sweden).[15]

Project company

The Nord Stream offshore pipeline is being ordered and will be operated by the special project company—Nord Stream AG. Nord Stream AG was incorporated in Zug, Switzerland on 30 November 2005. Shareholders of the company are the Russian gas company Gazprom (51% of shares), German energy companies BASF and E.ON (both 20%), and the Dutch gas company N.V. Nederlandse Gasunie (9%).[8][17] The Managing Director of Nord Stream AG is Matthias Warnig and the chairman of the shareholders' committee is Gerhard Schröder.

GDF Suez has agreed to acquire 9% stake. Accordingly, the stakes of E.ON and BASF will decrease by 4.5%.[32]

Transportation contracts

On 13 October 2005 Gazprom's export arm Gazprom Export signed a contract with German gas company Wingas, a joint venture of Gazprom and Wintershall (subsidiary of BASF), to supply 9 billion cubic metres of natural gas per year for 25 years.[60] On 16 June 2006 Gazprom and Danish DONG Energy signed a 20-year contract for delivery of 1 billion cubic metres Russian gas per year to Denmark, while DONG Energy will supply 600 million cubic metres natural gas per year to the Gazprom's subsidiary, Gazprom Marketing and Trading, in the United Kingdom.[61] 1 October 2009 the companies signed a contract to double the delivery to Denmark.[62]

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 an additional 4 billion cubic metres of annual gas supply through the Nord Stream pipeline.[63] On 19 December 2006, Gazprom and Gaz de France (now GDF Suez) agreed to an additional 2.5 billion cubic metres gas supply through the Nord Stream.[64]

Nord Stream pipeline will also supply a planned 1,200 MW gas-turbine power station near Lubmin, Germany. The power station will be jointly constructed and operated by Gazprom and E.ON.[65]

Controversy

The pipeline project has drawn criticism internationally, including from Poland, the United States and some environmental organizations (such as the World Wide Fund for Nature).[66][67][68][69] However, European Commission Energy commissioner office confirms the commitment of the Union to building the pipeline, stating the "EU continues to strongly support the Nord Stream pipeline as an additional source of gas supplies from Russia".[70]

Transparency

In his book "The New Cold War: Putin's Russia and the Threat to the West", Edward Lucas states that "though Nord Stream's backers insist that the project is business pure and simple, this would be easier to believe if it were more transparent."[71] In the report published by the Fridtjof Nansen Institute, Bendik Solum Whist notes that Nord Stream AG was incorporated in Switzerland, "whose strict banking secrecy laws makes the project less transparent than it would have been if based within the EU".[71] Secondly, the Russian energy sector "in general lacks transparency" and Gazprom "is no exception".[71]

Political aspects

Major existing and planned natural gas pipelines supplying Russian gas to Europe.

European dependence on Russian energy is already heavy and the pipeline expands dependence.[71][72] Opponents have seen the pipeline as a move by Russia to bypass traditional transit countries (currently Ukraine, Slovakia, Czech Republic, Belarus and Poland).[73] Some transit countries are concerned that a long-term plan of the Kremlin is to attempt to exert political influence on them by threatening their gas supply without affecting supplies to Western Europe.[74][75] The fears are strengthened by the fact that Russia has refused to ratify the Energy Charter Treaty. Critics of Nord Stream say that Europe could become dangerously dependent on Russian natural gas, particularly since Russia could face problems meeting a surge in domestic as well as foreign demand.[76] Following several cuts to supplies to Ukraine, and further on to Europe on 1 January 2006 and 1 January 2009, as well as foreign policy towards Eastern Europe, it has been noted that the distribution of gas can be used as a political tool from the Russian state through Gazprom, which it owns.[77] In April 2006 Radosław Sikorski, then Poland's defence minister, currently the foreign minister, compared the project to the infamous 1939 Nazi-Soviet Molotov–Ribbentrop Pact. [78]

The Russian response has been that the pipeline will increase Europe's energy security, and that the criticism is caused by bitterness about the loss of significant transit revenues, as well as the loss of political influence that stems from the transit countries' ability to hold Russian gas supplies to Western Europe hostage to their local political agendas.[79] It would reduce Russia's dependence on the transit countries as for the first time it would link Russia directly to Western Europe.[76] According to Gazprom, the direct connection to Germany would decrease risks in the gas transit zones, including the political risk of cutting off Russian gas exports to Western Europe.[80]

Swedish Defence Research Agency's Robert L. Larsson's 110-page study Nord Stream, Sweden and Baltic Sea Security (2007) counted over 55 incidents (cut-offs, explicit threats, coercive price policy and certain take-overs) since 1991, most with "both political and economic underpinnings".[71][72]

Security and military aspects

Swedish military experts and several politicians, including former Minister for Defence Mikael Odenberg, have stated that the pipeline can cause a security policy problem for Sweden and warnings have been raised about Russian espionage and military friction.[81] Odenberg said "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 opportunity to influence the project, except for the environmental aspects.[82] More political concerns were raised when Russian president Vladimir Putin stated that the ecological safety of the pipeline project will be ensured by using the Baltic Fleet of the Russian Navy.[83]

German weekly Stern has reported about the controversy concerning the monitoring system of the pipeline. There are concerns that the fiber optic cable and repeater stations along the pipeline could theoretically also be used for espionage. Nord Stream AG asserts that a fiber-optic control cable was neither necessary nor technically planned. At the same time Canadian company Fox-Tek has reported to have a negotiations with Gazprom to provide a cable to the Nord Stream pipeline.[84] Deputy Chairman of the Board of Executive Directors of Gazprom Alexander Medvedev has dismissed these concerns, stating that "some objections are put forward that are laughable—political, military or linked to spying. That is really surprising because in the modern world ... it is laughable to say a gas pipeline is a weapon in a spy war."[85]

Finnish military scholar Alpo Juntunen has said that even though the political discussion over Nord Stream in Finland concentrates on the various ecological aspects, there are clearly military implications to the pipeline that are not discussed openly in Finland.[86]

German Bundeswehr has asked Nord Stream to change the planned route because the pipeline would be laid close to a sea testing ground near the Island of Rügen, which is actively used for naval exercises.[87]

Economic aspects

Russian and German officials claim that the new pipeline would eventually lead to economic savings, despite the high investment cost. Two reasons given were the elimination of transit fees (as transit countries would be bypassed), and that an offshore pipeline has a higher operating pressure which leads to lower operating costs (by eliminating the necessity for expensive midway compressor stations.[88] Observers speak of one billion dollars annually which would be lost by transit countries but saved by countries connected to the pipeline.

Some have queried whether any savings will be gained, as the maintenance costs of a submarine pipeline are significantly higher than for an overland route. In 1998, former Gazprom chairman Rem Vyakhirev claimed that the project was economically unfeasible.[89] This estimation may not be valid anymore as the price of natural gas and construction costs have changed since then.

Russian Prime Minister Vladimir Putin has stated that Europe must decide whether it needs this pipeline or not. If not, Russia will build LNG plants instead of the pipeline, which according to Mr Putin will be more expensive for European countries.[70]

Environmental aspects

Environmental concerns raised are that the construction of the pipeline would disturb the sea bed, dislodging World War II-era naval mines and toxic materials including mines, chemical waste, chemical munitions and other items dumped in the Baltic Sea in the past decades, and thereby toxic substances could surface from the seabed damaging the Baltic's particularly sensitive ecosystem.[90][91][92][93] Swedish Environment Minister Andreas Carlgren had demanded that the environmental analysis should include alternative ways of taking the pipeline across the Baltic, as the pipeline is projected to be passing through areas considered environmentally problematic and risky.[94] Sweden's three opposition parties called for an examination of the possibility of rerouting the pipeline onto dry land.[93] Finnish environmental groups have been campaigning to consider the more southern route, claiming that the sea bed is flatter and so construction would be more straightforward, and therefore potentially less disruptive to waste, including dioxin, littered on the sea bed.[95] Latvian president Valdis Zatlers had said that Nord Stream was environmentally hazardous as, unlike the North Sea, there is no such water circulation in the Baltic Sea.[96]

The World Wide Fund for Nature (WWF) requests that countries party to the Baltic Marine Environment Protection Commission (HELCOM) safeguard the Baltic marine habitats, which could be altered by the implementation of the Nord Stream project.[69] Its Finnish branch has said it might file a court case against Nord Stream AG if the company did not properly assess a potential alternative route on the southern side of Hogland. According to Nord Stream AG, this is not a suitable route for the pipeline because of the planned conservation area near Hogland, subsea cables, and a main shipping route.[68]

Estonian scientist and former politician Endel Lippmaa raised concerns over the pipeline's planned path crossing zones of seismic activity in the Baltic Sea.[97] According to Ene Ergma, Speaker of the Parliament of Estonia, the pipeline work will entail ripping a canal in the seabed which will demand leveling the sand that lies along the way, atomizing volcanic formations and disposing of fill along the bottom of the sea, altering sea currents.[98]

The impact on bird and marine life in the Baltic Sea is also a concern, as the Baltic sea is recognized by the International Maritime Organization as a particularly sensitive sea area. Russian environmental organizations warn that the ecosystem in the Eastern part of the Gulf of Finland is the most vulnerable part of the Baltic Sea and assume damage to the island territory of the planned Ingermanland nature preserve as a result of laying the pipeline.[98] Swedish environmental groups are concerned that the pipeline is planned to pass too closely to the border of the marine reserve near Gotland.[99] Also Greenpeace is concerned that the pipeline would pass through several sites designated marine conservation areas.[100]

In April 2007, the Young Conservative League (YCL) of Lithuania started an online petition entitled "Protect the Baltic Sea While It’s Still Not Too Late!", translated into all state languages of the countries of the Baltic region.[101] On 29 January 2008 the Petitions Committee of the European Parliament organized public hearing on petition introduced by the leader of YCL – Radvile Morkunaite. On 8 July 2008, the European Parliament endorsed by 542 votes to 60 a non-binding report calling on the European Commission to evaluate the additional impact on the Baltic Sea caused by the Nord Stream project.[102]

Russian officials have described these concerns as far-fetched and politically motivated by opponents of the project. They argue that during the construction the seabed will be cleaned, rather than endangered. Russian Foreign Minister Sergey Lavrov has claimed that Russia fully respects the desire to provide for the 100% environmental sustainability of the project and that Russia is fully supportive of such an approach, and that all environmental concerns would be addressed in the process of environmental impact assessment.[103]

Concerns had raised, that Nord Stream AG was planning on rinsing out the pipeline with 2.3 billion liters of a solution containing glutaraldehyde, pumped directly into the Baltic Sea when the procedure was finished. Nord Stream AG responded that while it had indeed considered using glutaraldehyde, further study has shown that it would not have to be employed, and even had the chemical been used, the effects would have been brief and localized due to the speed with which the chemical breaks down once it comes in contact with water.[104]

One of the raised problems is that the Baltic Sea and particularly Gulf of Finland was heavily mined during the World War I and II, with many mines still on the sea.[100] According to Marin Mätteknik around 85,000 mines were laid during the First and Second World Wars, of which only half have been recovered. A lot of munitions have also been dumped in this sea.[105] Critics of the pipeline have voiced fears that the pipeline would disturb ammunition dumps. To detect mines, Marin Mätteknik developed a special surveying tool consisting of an array of 12 gradiometers.[105] On 29 February 2008, Nord Stream AG reported that they had detected about ten mines in the Exclusive Economic Zone of Finland. The Finnish navy has confirmed they lack resources to sweep the mines, but would offer to help identify them.[106] In November 2008 it was reported that the pipeline will run through old sea mine defense lines and that the Gulf of Finland is considered one of the most heavily mined sea areas in the world.[107] Sunken mines, which have been found on the pipeline route, lay primarily in international waters at a depth of more than 70 metres (230 ft). Nord Stream AG plans to detonate the mines underwater.[107]

Ethical issues

The former Chancellor of Germany, Gerhard Schröder, and the former President and the current Prime Minister of Russia, Vladimir Putin, were strong advocates of the pipeline project during the negotiation phase. International media alluded to a past relationship between the Managing Director of Nord Stream AG Matthias Warnig, himself a former East German secret police officer, and Vladimir Putin when he was a KGB agent in East Germany.[108][109][110][111] These allusions were denied by Matthias Warning saying that he met Vladimir Putin for the first time in his life in 1991, when Putin was the head of the Committee for External Relations of the Saint Petersburg Mayor's Office.[111][112]

The agreement to build the pipeline was signed ten days before the German parliamentary election. On 24 October 2005, a few weeks before Schröder stepped down as Chancellor, the German government guaranteed to cover €1 billion of the Nord Stream project cost, should Gazprom default on a loan. However, this guarantee expired at the end of 2006[113] without ever having been needed. Soon after leaving the post of Chancellor of Germany, Gerhard Schröder agreed to head the shareholders' committee of Nord Stream AG. This has been widely described by German and international media as a conflict of interest,[114][115][116] the implication 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. No formal charges have been filed against any party despite the years of exhaustive investigations.[113]

In February 2009, the Swedish prosecutor's office started an investigation based on suspicions of bribery and corruption after a college on the island of Gotland received a donation from Nord Stream. The 5 million Swedish kronor (US$574,000) donation was directed to a professor at Gotland University who had previously warned that the Nord Stream pipeline would come too close to a sensitive bird zone.[117] The consortium has hired several former high-ranked officials, such as the former undersecretary at the Swedish Prime Minister's office Ulrica Schenström and the former press secretary for many Social Democratic ministers Dan Svanell.[118] In addition, the former Prime Minister of Finland Paavo Lipponen has worked for Nord Stream as an adviser since 2008.[119]

Land-based alternatives

On 11 January 2007, the Ministry of Trade and Industry of Finland made a statement on the environmental impact assessment programme of the Russia-Germany natural gas pipeline, in which it mentioned that alternative routes via the Baltic states, Kaliningrad and/or Poland might theoretically be shorter than the route across the Baltic Sea, would be easier to flexibly increase the capacity of the pipeline, and might have better financial results.[120] There were also calls from Sweden to consider rerouting the pipeline onto dry land.[93] Poland had proposed the construction of a second line of the Yamal–Europe pipeline, as well as the Amber pipeline through the Baltic states and Poland as land-based alternatives to the offshore pipeline.[121] The Amber project foresees laying a natural gas pipeline across the Tver, Novgorod and Pskov oblasts in Russia and then through Latvia and Lithuania to Poland, where it would be re-connected to the Yamal–Europe pipeline.[3] Latvia has proposed using its underground gas storage facilities if the onshore route were to be used.[96] Proponents have claimed that the Amber pipeline would cost half as much as an underwater pipeline, would be shorter, and would have less environmental impact.[122] Critics of this proposal say that in this case it would be more expensive for the suppliers over the long-term perspective, because the main aim of the project is to reduce transit costs.[123] Nord Stream AG has responded that the Baltic Sea would be the only route for the pipeline and it will not consider an overland alternative.[124]

Soviet war graves

The former member of the European Parliament from Estonia, Andres Tarand has raised the issue that the Nord Stream pipeline could disturb Soviet war graves dating from naval battles in 1941. A Nord Stream spokesman has stated that only one sunken ship is in the vicinity of the planned pipeline and added that it wouldn't be disturbed.[125] However, on 16 July 2008 was announced that one of DOF Subsea's seismic vessels during a shoot for the planned Nord Stream pipeline in Finland's exclusive economic zone in the Gulf of Finland, discovered the wreck of a submarine with Soviet markings, believed to have sunk during World War II.[55]

In addition to the wreck of the Soviet submarine, there are sunken ships on the route of Nord Stream in the Bay of Greifswald and in the Gulf of Finland. The ship in the Bay of Greifswald is one of 20 sunk in 1715 by the Swedish navy to create a physical barrier across the shallow entrance to the Bay of Greifswald coastal lagoon.[126] The sunken ship in the Gulf of Finland probably belonged to the fleet of Peter I of Russia, headed to Finland in 1713 under the Tsar's personal command.[127] There are plans to raise both wrecks.

See also

References

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