Page 6 - FSUOGM Week 44 2019

FSUOGM PIPELINES & TRANSPORT FSUOGM
Denmark greenlights Nord Stream 2
DENMARK
Gazprom is now clear to complete the pipeline.
DENMARK has approved construction of Russia’s Nord Stream 2 gas pipeline through its waters, removing the last major obstacle to the divisive project’s completion.
The Danish Energy Agency (DEA) said on October 30 it had issued a permit allowing Gazprom to lay a 147-km section of the pipeline through Denmark’s exclusive economic zone, southeast of the island of Bornholm.
The approval is a major boon for Russia, which is eager to defend and expand its share of Europe’s gas market despite EU efforts to diversify supply. It also comes as a blow to the US, which has fiercely opposed Nord Stream 2 while promoting its own LNG as an alternative source of gas for Europe. Washington has sought to impose sanctions on the project, which even if enacted are likely to come too late to make an impact.
With more than 2,100 km of its 2,400 km of pipes now in place, Gazprom may still have enough time to complete Nord Stream 2 by the end of this year as planned. The Nord Stream 2 operating company, a subsidiary of Gazprom, said in a statement welcoming Denmark’s approval that it would begin pre- paratory works on its Danish section within weeks. But how quickly it can commission the pipeline and bring it to its peak flow capacity of 55bn cubic metres per year is another matter.
Commissioning of a major gas pipeline can take months. And Nord Stream 2 can only be conncted to German pipelines through a spe- cial procedure that can happen between mid- May and the end of October under permits it received from German authorities, due to envi- ronmental concerns.
“Therefore, the window closes by tomorrow and Nord Stream wouldn’t be able to do that until mid-May 2020,” Mateusz Kubiak, an ana- lyst at consulting firm Esperis, told Politico on October 30.
But timing is critical.
Gazprom devised Nord Stream 2 as means of redirecting its European gas shipments away from Ukraine, currently the main transit route for Russian gas sales to the continent. Its long- term transit contract with Ukraine’s Naftogaz is due to expire at the end of this year, and Moscow had hoped that Nord Stream 2 would be ready by then so it could divert as much gas as possible away from Ukraine before agreeing new transit terms. Negotiations are ongoing, with little sign of progress.
Russia may also have to send some supplies via Nord Stream 2 that would otherwise have been pumped through its Nord Stream channel, following an EU court ruling limiting Gazprom’s access to Germany’s OPAL pipeline that handles Nord Stream’s gas.™
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w w w . N E W S B A S E . c o m Week 44 06•November•2019