Nord Stream consortium awards pipeline contracts

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, Jan. 27 -- The Nord Stream AG consortium said it will commission Sumitomo Group, Europipe GMBH, and United Metallurgical Co. (OMK) to supply 1 million tons of steel pipe for construction of the second pipeline of the Nord Stream project.

“The contract value is approximately €1 billion of which German Europipe will be awarded 65%, the Russian pipe company OMK 25%, and Japanese Sumitomo 10%,” said partners OAO Gazprom, BASF SE/Wintershall Holding AG, E.On Ruhrgas, and Gasunie.

They said the tender award for the second 1,220 km gas pipeline from Vyborg in Russia to Lubmin in Germany “will ensure timely delivery of the pipes in line with the logistic requirements of the Nord Stream project.”

The partners said the decision was made by the shareholder’s committee following “thorough evaluation” of bids from German, Japanese, and Russian companies.

“With €1 billion, the total volume of the contracts is below the price level of the first line reflecting the current market development of increased competition and more available capacity,” said Henning Kothe, project director at Nord Stream, who added, “Three times the amount of steel pipes required was quoted.”

The consortium partners said the tender for the second line was completely independent of the 2007 tender of the first line and procurement of steel pipe for the second line was “the last outstanding significant decision” regarding the requirements for the project as well as for the overall budget.

With the contracts for the second line, which are expected to be signed within weeks, Nord Stream said it has secured the pipe at the current price level. Delivery of the pipe for the second pipeline is scheduled to start in May.

First line construction
Meanwhile, the partners said construction of the first line of the Nord Stream Pipeline is scheduled to commence Apr. 1 and construction of the second line is planned to start in spring 2011.

The Nord Stream partners also said they received permits for the project from all of the states whose waters it crosses, including Russia, Finland, Sweden, Denmark, and Germany.

However, deputies of Poland's main opposition party—Law and Justice—this week called on the Donald Tusk government to appeal the decision of the German Federal Maritime and Hydrographic Agency (BSH) approving the Nord Stream gas pipeline.

According to the party, the pipeline will block big ships’ access to Polish ports in Swinoujscie and Szczecin.

At yearend 2009, BSH granted a permit to Nord Stream AG to construct the 31-km section of the natural gas pipeline in Germany's Exclusive Economic Zone.

"This means the launching of the construction," said Grazyna Gesicka, who heads the Law and Justice parliamentary caucus. "From Poland's point of view this means a failure of Poland's energy policy. Poland's diplomacy was unable to stop this investment."

Gesicka has called on Poland's government to appeal the decision and to ask Germany to present full technical documentation of the construction to Poland.

According to Law and Justice Member of the European Parliament Marek Grobarczyk, the Nord Stream pipeline will endanger deliveries to a LNG terminal in Swinoujscie and will block large vessels from accessing the ports in Swinoujscie and Szczecin.

Contact Eric Watkins at

Related Articles

House panel’s crude export ban hearing weighs urgency against caution

07/10/2015 A US House Energy and Commerce subcommittee hearing on legislation to repeal the ban on exporting US-produced crude oil quickly broke along party l...

Twelve workers killed in Nigeria pipeline explosion

07/10/2015 Eni SPA reported that an explosion occurred July 9 at the repair site for the Tebidaba-Clough Creek oil pipeline in Nigeria’s onshore Niger Delta.

Transco seeks FERC approval for New York Bay Expansion project

07/09/2015 Transcontinental Gas Pipe Line Co. LLC (Transco), a wholly owned subsidiary of Williams Partners LP, has filed an application with the US Federal E...

House Oversight panel subpoenas Kerry for Keystone XL documents

07/09/2015 The US House Oversight and Government Reform Committee issued a subpoena to US Sec. of State John F. Kerry for reports, recommendations, letters, a...

Ending crude export ban would help rural US areas, House panel told

07/09/2015 Rural US communities generally have benefited from the nation’s crude oil production renaissance, and potentially could be helped more if restricti...

AER orders Apache Canada to address integrity of pipeline system

07/08/2015 Alberta Energy Regulator has directed Apache Canada Ltd. to address the integrity of its pipeline management system because of “failure to follow p...

API releases pipeline safety recommended practice

07/08/2015 The American Petroleum Institute released a pipeline safety recommended practice that it developed with engagement from the US Pipeline and Hazardo...

BLM approves ROW for Elko gas pipeline expansion project

07/07/2015 The US Bureau of Land Management’s Tuscarora, Nev., field office signed a decision record approving a right-of-way for Paiute Pipeline Co.’s (PPC) ...

Obama urged by IPAA president to lift ban on US crude exports

07/07/2015 Commending the administration for its actions allowing some condensate to be exported as a petroleum product, Independent Petroleum Association of ...
White Papers

Definitive Guide to Cybersecurity for the Oil & Gas Industry

In the Oil and Gas industry, there is no single adversary and no single threat to the information tech...

UAS Integration for Infrastructure: More than Just Flying

Oil and gas companies recognize the benefits that the use of drones or unmanned aerial systems (UAS) c...

Solutions to Financial Distress Resulting from a Weak Oil and Gas Price Environment

The oil and gas industry is in the midst of a prolonged worldwide downturn in commodity prices. While ...
Sponsored by

2015 Global Engineering Information Management Solutions Competitive Strategy Innovation and Leadership Award

The Frost & Sullivan Best Practices Awards recognise companies in a variety of regional and global...
Sponsored by

Three Tips to Improve Safety in the Oil Field

Working oil fields will always be tough work with inherent risks. There’s no getting around that. Ther...
Sponsored by

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by
Available Webcasts

Better Data, Better Analytics, Better Decisions

When Tue, Oct 27, 2015

The Oil & Gas industry has large amounts of data stored in multiple systems which are purpose built for certain tasks. However, good decisions require insights based upon the data in all of these systems. These systems in turn do not talk to each other. So the process of analyzing data, gaining insights, and making decisions is a slow one and often a flawed one. Good decisions require accurate analytics and accurate analytics require superior/sustainable data quality and governance. This webinar focuses on:

  • The importance of data quality and governance
  • How technological advances are making data quality and governance sustainable in order to get the accurate analytics to make solid decisions.

Please join us for this webcast sponsored by Seven Lakes Technologies and Noah Consulting.


Operating a Sustainable Oil & Gas Supply Chain in North America

When Tue, Oct 20, 2015

Short lead times and unpredictable conditions in the Oil & Gas industry can create costly challenges in supply chains. By implementing a LEAN culture of continuous improvement you can eliminate waste, increase productivity and gain end-to-end visibility leading to a sustainable and well-oiled supply chain.

Please join us for this webcast sponsored by Ryder System, Inc.


On Demand

Leveraging technology to improve safety & reliability

Tue, Sep 22, 2015

Attend this informative webinar to learn more about how to leverage technology to meet the new OSHA standards and protect your employees from the hazards of arc flash explosions.


The Resilient Oilfield in the Internet of Things World

Tue, Sep 22, 2015

As we hear about the hype surrounding the Internet of Things, the oil and gas industry is questioning what is different than what is already being done. What is new?  Using sensors and connecting devices is nothing new to our mode of business and in many ways the industry exemplifies many principles of an industrial internet of things. How does the Internet of Things impact the oil and gas industry?

Prolific instrumentation and automation digitized the industry and has changed the approach to business models calling for a systems led approach.  Resilient Systems have the ability to adapt to changing circumstances while maintaining their central purpose.  A resilient system, such as Maximo, allows an asset intensive organization to leverage connected devices by merging real-time asset information with other critical asset information and using that information to create a more agile organization.  

Join this webcast, sponsored by IBM, to learn how about Internet of Things capabilities and resilient systems are impacting the landscape of the oil and gas industry.


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!


Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected