Nord Stream go-ahead

13 Feb 2010

  Finnish environmental officials have given the final permission. The Nord Stream, a German-Russian joint venture, is to begin building the pipeline later this year.

 “In May 2011 the construction is to be completed on the sea section and on land in Germany and Russia,” Russian prime minister Vladimir Putin said. “And gas will start to be pumped in September (2011).”

 Following the approval by Danish, German, Russian and Swedish authorities, Finland was the last country in the region to grant permit. About 375 kilometers of the pipeline will run through Finland’s exclusive economic zone in the Gulf of Finland.

 The Nord Stream project involves building a 1,223-kilometer pipeline to deliver gas to western Europe from Russia, bypassing Eastern Europe. When finished, it will cross the Baltic sea and will connect the Russian port of Vyborg with the German port of Greifswald.

 The first branch of the pipeline with a capacity to ship 27.5 billion cubic meters a year will become operational in two years. The addition of a second branch will double capacity to 55 billion m³ a year. The overall cost of the project is put at about 7.4bn euros.

 Russia’s Gazprom  has a 51% stake in the Nord Stream AG joint venture. BASF/Wintershall and E.ON Ruhrgas each have 20% stakes and N.V. Nederlandse Gasunie has 9%.


 This pipeline, that in the past was called by some Polish politicians “the new Molotov-Ribbentrop pact”, becomes the first transit option for Russian gas for European customers that avoids networks in Ukraine. A 2009 dispute between Kiev and Moscow forced Gazprom to cut supplies for weeks. Polish Foreign Minister Radosław Sikorski said that this project is only “a waste of European consumers’ money”. The Polish authorities have pointed out several times that the Russo-German consortium has not been able to explain why a sea route is better than the cheaper land option. Warsaw and other ex-communist Baltic Sea states such as Estonia and Lithuania have warned that the pipeline will increase Europe’s direct dependence on Russia for natural gas

History and reasons

 The senior project, Nord Stream, emerged in 1997 as a projected route for the direct transportation of gas from Russia to Northern Germany and Western Europe via the Baltic Sea. The new pipeline was intended not only to diversify the export routes for Russian gas in case of problems with the transit states, but also to pave the way for Gazprom to enter new markets in Europe.

Gas extraction in the North Sea is decreasing, and the current producers and net exporters of this raw material, Denmark, Holland and Great Britain, are gradually turning into importers. The reduced version of the Nord Stream project (an idea to build a branch to Great Britain was abandoned)  will be build now.

One of Moscow’s reasons for constructing new routes, as we said before, is that in the current system of gas transportation to Europe, transit via Ukraine, Belarus and Poland is perceived as a risk factor. However, the projected new routes cannot solve the problem of Gazprom’s transit dependence, as they cannot fully replace the Ukrainian route.

 The second branch of Nord Stream  (the gas for the first branch has now almost fully entered into contracts) could transport the gas now sent by the Yamal-Europe pipeline via Belarus and Poland (about 31 billion m³). Theoretically, some portion of the gas now sent via Ukraine could be redirected to Nord Stream’s second branch, but this would require constructing new branches and connectives between the gas mains on Russian territory.

Environmental worries

The Regional State Administrative Agency for Southern Finland says that while the construction of the pipeline is expected to release substances like dioxins, metals and nutrients from the seabed they would not cause long-term damage to marine habitats.

The agency added that construction would impose temporary limitations on marine traffic, with a long-term impact on fishery. The Nord Stream consortium is to pay compensation to the fishing industry. The risk of damage to the pipeline is low.

 More than 100m euros have been spent on environmental research. “I believe that Nord Stream will be environmentally safe and reliable”, guaranteed Vladimir Putin.

 Some Baltic countries fear the project could stir up toxins lying on the sea bed, especially those inside a vast number of WWII-era armaments. “It’s serious. We are worried about the dioxins and other poisons on the seabed,” Estonian Prime Minister Andrus Ansip said. “We expect our scientists to get full information about it all.”

 There are also other worries. According to a report on Swedish television, Russian boats dumped barrels of radioactive material, from a military base in Latvia, into Swedish waters in the early 1990s.

 The Baltic is one of the most polluted area in the world and is in danger of becoming a dead sea. In 2007 the countries of the region set the goal of restoring the environmental situation by 2021.

Giuseppe D’Amato

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