Page 9 - FSUOGM Week 32 2019

FSUOGM PIPELINES & TRANSPORT FSUOGM
Nord Stream 2 risks eight-month delay over Danish permitting debacle
DENMARK
Russia has had permits with Denmark pending since 2017.
RUSSIA’S Nord Stream 2 project risks falling eight months behind schedule because of per- mitting delays in Denmark, Reuters reported on August 8.
e 1,230-km pipeline, now more than 70% complete, is tentatively scheduled for launch before the end of 2019, enabling Russia to pump an extra 55bn cubic metres per year of gas to northern Europe. But Russia is still awaiting approval from the authorities in Copenhagen to run the pipe through 147-175 km of Danish territorial waters.
e Russian-owned Nord Stream 2 operating company has submitted two route applications to the Danish Energy Agency since 2017. In March, however, the department requested that a new route be considered through Denmark’s exclusive economic zone (EEZ) – a move Nord Stream 2 claimed was “a deliberate attempt to delay the project’s completion.”
In a complaint letter to Danish authorities in April, now seen by Reuters, Nord Stream 2 warned that the third route request had already added €100mn ($113mn) to the project’s cost,
initially estimated at €9.5bn euros ($11bn). If the request is not withdrawn, further costs of €560mn ($633mn) could be incurred and the pipeline’s start-up could slip eight months behind schedule, Nord Stream 2 said.
“Delaying the project will result in a signi - cant nancial loss for Nord Stream 2,” the oper- ator wrote, adding that it had “repeatedly asked for a status update ... without receiving any response.”
The timing of Nord Stream 2’s completion is also key, with the end-2019 launch date coin- ciding with the expiry of Russia’s long-term gas transit contract with Ukraine. Russia is in talks with Ukraine on establishing a new contract, and hopes that having Nord Stream 2 online will enable it to agree on considerable lower transit volumes through Ukrainian territory starting in 2020.
Russia’s state-owned gas supplier Gazprom has warned in the past it could take Denmark to court over the permitting delays. It has also sued the European Commission over new gas legisla- tion it claims is aimed at impeding Nord Stream 2’s development. ™
Zvezda shipyard loses two icebreaker orders
RUSSIA
Zvezda lost the order to United Shipbuilding.
THE competition to build the atomic icebreaker eet that will open up Russia’s northern route from Europe to Asia is erce. Global warming has made taking a shortcut around the top of Russia possible, but the icy water is only naviga- ble for one month a year. Russia already has three nuclear powered icebreaker needed to keep the route open but two shipyards are vying to cap- ture this lucrative business.
Russia’s Zvezda shipyard, controlled by state holding company RosNe eGaz, lost an order for two new atomic icebreakers worth RUB100bn ($1.5bn) this month. Zvezda was pipped to the post by the United Shipbuilding Corporation (OSK) as the only other bidder and won the lucrative order, Vedomosti daily reported on August 7 citing an announcement by the Rosa- tom state atomic energy agency.
The two ships are the fourth and the fifth atomic icebreakers to be build, and are the most expensive non-military vessels to ever be built in Russia. e ships are schedule to be ready by 2024 and 2026, with RUB45bn of the construc- tion costs being nanced by the state budget.
Zvezda is controlled by RosNe eGaz, a state holding that also holds the government stake in oil major Rosne and is headed by Igor Sechin,
who is also the CEO of Rosne .
As Russia gears up to develop the Arc-
tic maritime Northern Sea route as well as its burgeoning liquid natural gas (LNG) business that also requires large technically advanced ships for transport, Zvezda has emerged as the largest shipyard in Russia, a er RUB202bn of investment and it has been eyeing generous state support.
Sechin has repeatedly used the investment in Zvezda as an excuse to accumulating funds in RosNe eGaz and dodge the Ministry of Finance order that all state-owned enterprises (SOEs) payout 50% of their pro ts as dividends.
However, Zvezda is still lagging behind OSK in terms of know-how and technology and could not participate in the tender to build the two atomic icebreakers due to insu cient licensing. OSK has already built the three other atomic icebreakers Arktika, Sibir and Ural that were launched in 2013, 2015, and 2016, respectively.
Sources told Vedomosti that Zvezda is still poised to build Russia’s largest $16bn icebreaker, Leader. As reported by bne IntelliNews, the state has also agreed to subsidise the construc- tion of 15 LNG tankers for Novatek gas major at Zvezda.™
Week 32 14•August•2019 w w w . N E W S B A S E . c o m P9