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 hippalus@yahoo.com.

Related Articles

Eagle Ford economic boost jumps to $87 billion

12/12/2014 The Texas Eagle Ford shale supported more than 155,000 full-time equivalent jobs and provided more than $2.2 billion in revenue for local governmen...

EnCana, Talisman optimist on Montney, Duvernay

12/12/2014 EnCana Corp. has achieved significant cost savings in the Montney and Duvernay plays, executives told analysts while discussing EnCana's third-quar...

EPA approves Magellan’s Corpus Christi splitter project

12/12/2014 The US Environmental Protection Agency has issued a final greenhouse gas prevention of significant deterioration construction permit to Magellan Pr...

ETP eyes larger capacity for planned Bakken pipe

12/12/2014 Energy Transfer Partners LP has launched a binding expansion open season to boost capacity on a planned pipeline system that would move oil from th...

Common interests lead to Gtuit, Corval partnership

12/12/2014

Gtuit was started 3 years ago by three engineers in Billings, Mont, who developed a mobile, remote NGL capture and gas conditioning system.

OGJ Newsletter

12/08/2014

International news for oil and gas professionals

EPA air proposals should recognize progress, API official says

12/08/2014 The US Environmental Protection Agency should recognize progress that is continuing before it considers imposing costly new air quality requirement...

Keyera to own interest in new deep-cut gas plant

12/02/2014 Keyera Corp., Calgary, will take a 35% stake with Bellatrix Exploration Ltd., Calgary, in a deep-cut natural gas processing plant and related pipel...

Pembina to add gas plant to Alberta location

12/01/2014 Pembina Pipeline Corp., Calgary, will build a shallow-cut gas processing plant and expand existing capacity at Musreau, northwest of Edmonton, by 1...

White Papers

AVEVA NET Accesses and Manages the Digital Asset

Global demand for new process plants, power plants and infrastructure is increasing steadily with the ...
Sponsored by

AVEVA’s Approach for the Digital Asset

To meet the requirements for leaner project execution and more efficient operations while transferring...
Sponsored by

Diversification - the technology aspects

In tough times, businesses seek to diversify into adjacent markets or to apply their skills and resour...
Sponsored by

Engineering & Design for Lean Construction

Modern marketing rhetoric claims that, in order to cut out expensive costs and reduce risks during the...
Sponsored by

Object Lessons - Why control of engineering design at the object level is essential for efficient project execution

Whatever the task, there is usually only one way to do it right and many more to do it wrong. In the c...
Sponsored by

Plant Design for Lean Construction - at your fingertips

One area which can provide improvements to the adoption of Lean principles is the application of mobil...
Sponsored by

How to Keep Your Mud System Vibrator Hose from Getting Hammered to Death

To prevent the vibrating hoses on your oilfield mud circulation systems from failing, you must examine...
Sponsored by

Duty of Care

Good corporate social responsibility means implementing effective workplace health and safety measures...
Sponsored by

Available Webcasts


On Demand

Optimizing your asset management practices to mitigate the effects of a down market

Thu, Dec 11, 2014

The oil and gas market is in constant flux, and as the price of BOE (Barrel of Oil Equivalent) goes down it is increasingly important to optimize your asset management strategy to stay afloat.  Attend this webinar to learn how developing a solid asset management plan can help your company mitigate costs in any market.

register:WEBCAST


Parylene Conformal Coatings for the Oil & Gas Industry

Thu, Nov 20, 2014

In this concise 30-minute webinar, participants have an opportunity to learn more about how Parylene coatings are applied, their features, and the value they add to devices and components.

register:WEBCAST


Utilizing Predictive Analytics to Optimize Productivity in Oil & Gas Operations

Tue, Nov 18, 2014

Join IBM on Tuesday, November 18 @ 1pm CST to explore how Predictive Analytics can help your organization maximize productivity, operational performance & associated processes to drive enterprise wide productivity and profitability.

register:WEBCAST


US HYDROCARBON EXPORTS Part 3 — LNG

Fri, Nov 14, 2014

US LNG Exports, the third in a trilogy of webcasts focusing on the broad topic of US Hydrocarbon Exports.

A discussion of the problems and potential for the export of US-produced liquefied natural gas.

These and other topics will be discussed, with the latest thoughts on U.S. LNG export policy.

register:WEBCAST


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