Nord Stream 2 to come into service in November

Nord Stream 2 to come into service in November

The first string of the Nord Stream 2 pipeline is expected to be finished in November, Chief Financial Officer at Nord Stream 2 AG Paul Corcoran said during the European Gas Conference.

The construction of the second string will be finished in December, according to him.

Corcoran added that so far more than 500 kilometers of pipes have been laid by Nord Stream 2 AG, which is 30% of its total length, RIA Novosti reported.

In addition, he said that the company is conducting negotiations with export credit agencies to attract project financing. "We are looking at somewhere around $6 billion euro," he said.

A leading analyst of the National Energy Security Fund, a lecturer at the Financial University under the Government of the Russian Federation, Igor Yushkov, speaking to Vestnik Kavkaza, noted that the implementation of Nord Stream 2 is guaranteed now, but political opponents of the project may interfere with its operation after the pipeline is completed. "The main risk was that the U.S. could impose direct sanctions, first of all, on the Swiss-based Allseas Group - but then the Americans would essentially spoil relations with Europe," he said.

"Risks are possible at the operational stage: a number of political forces in Europe are trying to raise the issue of what type of duty Nord Stream 2 should have. In particular, the Croats said that they will start the discussion about where Europe begins. In terms of the regulation of gas pipeline services, the onshore part of Nord Stream 2 is owned by European companies, but the offshore part is owned by Gazprom, which is the only gas supplier for this pipe, which contradicts the Third Energy Package. If Europeans try to apply antitrust legislation for the offshore part, Gazprom will be at risk - although the European Commission’s legal service responded to previous attempts that it contradicted international law," Igor Yushkov explained.

Deputy director of energy policy of the Institute of Energy and Finances, Alexey Belogoriev, in turn, noted that Nord Stream 2 needs a permission to lay pipes through the Danish territory. "The construction schedule of the first string is based on the fact that by September they plan to obtain a permission to lay pipes through territorial waters or through the Danish special economic zone. Denmark is doing everything possible to delay the time for consideration of both applications," he said.

"In addition to the problem with Denmark, the risk of U.S. sanctions remains. Of course, sanctions will not disrupt the project, but may slow down its implementation and increase the cost, since we will have to use circumferential legal ways to attract contractors. The discussion of amendments to the Third Energy Package has been also intensified. Romania took over EU presidency, and it has a very negative attitude towards the Nord Stream 2, therefore, Bucharest is actively promoting new options for amendments in the European Parliament and the European Council. However, their promotion depends from Germany, which has blocked previous attempts. But if they are adopted, they will only concern the rules for using the pipeline, the construction will not be affected," Alexei Belogoryev concluded.

The Nord Stream 2 pipeline is expected to come into service at the end of 2019. The pipeline is set to run from the Russian coast along the Baltic Sea bed to the German shore. It will go through the exclusive economic zones and territorial waters of five countries - Russia, Finland, Sweden, Denmark, and Germany, thus bypassing transit countries of Ukraine, Belarus, Poland and other Eastern European and Baltic states. Each of the pipeline’s two stretches will have a capacity of 27.5 bln cubic meters. The total cost of the project has been estimated at 9.5 bln euro.

Nord Stream 2 AG, with Gazprom being the only shareholder, is the operator of the Nord Stream 2 pipeline construction project. Gazprom's European partners in the project are Germany’s Wintershall and Uniper, Austria’s OMV, France’s Engie and Royal Dutch Shell.


Vestnik Kavkaza

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