Danish delay threatens Nord Stream 2 progress
Russia could miss deadline to open pipeline unless construction permit is soon approved
Russia could miss the deadline to begin pumping gas to Europe through the controversial Nord Stream 2 gas pipeline, unless Denmark approves construction in its waters in the next few weeks.
The €9.5bn link that will carry gas from Kremlin-controlled Gazprom to Germany has received authorisation from several of the Baltic Sea nations whose waters it will cross, but not Denmark. Permit applications with the Danish Energy Agency for two different proposed routes have been pending for months, throwing the planned year-end launch date into doubt.
“If we do not get approval from the Danish in the next few weeks then we will not make the deadline,” a senior official close to Nord Stream 2 told the Financial Times. A second source close to the project said the next month would be critical. “It is almost August and that creates concern if not panic,” the person said.
Any delay would be another blow
for a project designed to double the capacity of the first Nord Stream pipeline, fully launched in 2012. Nord Stream 2 is designed to allow Gazprom to reroute the bulk of the gas volumes so far running through Ukraine. The launch of the pipeline was due to coincide with the expiration of an existing gas transit contract through Ukraine on December 31.
However, Poland and the Baltic states have sought to block construction of the export pipeline, saying it will increase Europe’s reliance on Russia, while President Donald’s Trump administration in Washington has threatened to sanction the project. Moscow insists the link it is a purely economic venture.
Nord Stream 2 is fully owned by Gazprom but part-financed by five European energy companies: Shell, Engie, OMV, Wintershall and Uniper.
Viktor Zubkov, head of Gazprom’s board of directors, insisted last week that the company’s timeline remained on track. “[Denmark] should give us the permit in October, and then we can complete by the end of the year the imperative project that is commercial and that Germany supports,” he told Interfax, a news agency.
Alexei Miller, Gazprom chief executive, said last month that the 130km Danish leg of the pipeline would take a maximum of five weeks to complete.
But experts say that testing and filling the pipeline would lengthen the process. “Not only do they have to lay two strings of the pipeline, each of which takes about a month plus weeks of testing and commissioning, but also take into account the decreasing pipeline laying speed due to worsening weather conditions in the Baltic . . . and possible force majeure situations,” said Danila Bochkarev, senior fellow at the Brussels-based East-west Institute think-tank.
He noted that Gazprom had been pumping record volumes of gas into underground storage tanks in Europe, which signalled that the company would enter the peak demand period without either the Ukraine transit route or Nordstream 2. “The company is preparing for the worst but still trying to ensure customers are supplied throughout the winter,” Mr Bochkarev said.