Page 10 - Euroil Week 32 2019

EurOil PIPELINES & TRANSPORT EurOil
Nord Stream 2 risks eight-month delay over Danish permitting debacle
DENMARK
Russia has been waiting on permitting decisions 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 pro- ject’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 If the request is not withdrawn, further costs of €560mn ($633mn) could be incurred and the pipeline’s start-up could slip eight months behind schedule, Nord Stream 2 said.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.”
e 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. ™
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w w w . N E W S B A S E . c o m Week 32 15•August•2019