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NORD STREAM

Danish Nord Stream delay ‘could cost €660m’

Denmark's demand for a third environmental assessment for the Nordstream 2 gas pipeline would inflate costs by as much as €660m and delay the pipeline by eight months, the Russian-led consortium behind the project has complained.

Danish Nord Stream delay 'could cost €660m'
Workers at the Nord Stream 2 construction site in Kingisepp, Russia, in June. Photo: Anton Vaganov / Reuters / Ritzau Scanpix
In a letter sent to the Danish authorities sent in April, the Nordstream consortium called for the Danish Energy Board of Appeal to overturn a demand from the Danish Energy Agency that the consortium submit an assessment for a third route past the island of Bornholm. 
 
“Delaying the project will result in a significant financial loss for Nord Stream 2,” the letter, which was obtained by the news agency via a freedom of information request, complained. 
 
Nord Stream 2 added that it had “repeatedly asked for a status update…without receiving any response”.
 
The agency confirmed to Reuters that the consortium had appealed the decision, and said that it had in response outlined the rationale for its request. 
 
 
The pipeline is highly political, as it will allow Russia to supply gas to Germany, its biggest customer, without relying on transit pipelines through Ukraine. In April, US Vice President Mike Pence reiterated US criticism of the pipeline, saying it was “wrong for Germany to become dependent on Russian energy.”
 
In a statement also issued in April, the consortium complained that the request “can only be seen as a deliberate attempt to delay the project’s completion”.
 
The delay to the pipeline is likely to mean it is not completed before Russia needs to sign a new transit contract with Ukraine,  after the existing contract expires at the end of this year. 
 
This will strengthen Kiev's hand in the negotiations. Russia's energy minister Alexander Novak last month revealed that Russia had offered Ukraine a short-term deal replacing the current 10-year contract. 
 
Nord Stream 2 said in May, following Denmark's request, that the pipeline might make its first deliveries in 2020 rather than at the end of this year as previously hoped. 
 
The consortium in June announced that it had decided to route the 1,230km pipeline outside Danish territory in order to simplify its application.   
 

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RUSSIA

Denmark’s Nord Stream green light ‘weakens Europe’: Ukraine president

Ukrainian President Volodymyr Zelensky slammed on Thursday Denmark's decision to grant a Russian gas project a building permit, saying it "strengthens Russia and weakens Europe."

Denmark's Nord Stream green light 'weakens Europe': Ukraine president
Nord Stream 2 pipeline being laid in the Baltic Sea. Photo: Stine Jacobsen/Reuters/Ritzau Scanpix

On Wednesday, Copenhagen gave Russia's Nord Stream 2 project a permit to build a section of the natural gas pipeline on the Danish continental shelf in the Baltic Sea.

The 9.5-billion-euro pipeline led by Gazprom has raised fears that Moscow will be able to increase pressure on Ukraine as Europe will be less reliant on the ex-Soviet country for transiting supplies.

“We understand that this is not just a matter of energy security, it is a geopolitical issue,” Zelensky said during a joint news conference with NATO chief Jens Stoltenberg.

“Therefore I will tell you frankly that this strengthens Russia and weakens Europe,” Zelensky added.

The 41-year-old president, who came to power in May, said, however, that Ukraine was “ready for such a decision.”

“We understood this could happen,” he said.

The Baltic energy link will double the capacity to ship gas between Russia and Germany, sparking concerns about Western Europe's increasing dependence on Russian gas.

Nord Stream 2's proponents — led by Germany, the EU's biggest economy — say the pipeline will provide reliable supplies at an acceptable price.

But US President Donald Trump has threatened to hit Nord Stream 2 and those tied to it with sanctions, saying it makes Germany “a hostage to Russia.”

Most of Russia's gas destined for Europe passes through Ukraine.

Ukraine wants to remain a major transit route for Russian gas while Moscow seeks to send more gas to Europe via pipelines bypassing Ukraine.

Ties between Ukraine and Russia were shredded after a bloody uprising ousted a Kremlin-backed regime in 2014.

Moscow went on to annex Crimea and support insurgents in eastern Ukraine in a conflict that has killed some 13,000 people.

READ ALSO: Denmark clears way for Russian gas pipeline

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