Finns approve Nord Stream gas pipeline

Finland’s Uusimaa Regional Environment Center has approved the Nord Stream gas pipeline but said more information on potential environmental damage must be supplied by the project’s backers, OAO Gazprom, Wintershall, E.On Ruhrgas, and Nederlandse Gasunie.

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, July 2 -- Finland’s Uusimaa Regional Environment Center has approved the Nord Stream gas pipeline but said more information on potential environmental damage must be supplied by the project’s backers, OAO Gazprom, Wintershall, E.On Ruhrgas, and Nederlandse Gasunie.

"We are committed to provide the further information that authorities have asked from us," said Nord Stream spokesman Sebastian Sass, referring to the request by the Uusimaa authority for "further investigations" into pollution damage, maritime safety, and the impact on sea life.

Plans call for the 1,220-km Nord Stream line to extend beneath the Baltic Sea from the Russian port city of Vyborg to Greifswald, in northern Germany. But the project needs approval from Russia, Germany, Finland, Sweden, and Denmark before construction can begin as the line will run close to their Baltic coastlines.

Approval by the Uusimaa authority is considered important as the Finnish government could not give its consent to the project before the environmental agency had reported its findings. Now, a separate environmental planning authority must also review Nord Stream's plans before building can begin.

The Nord Stream project is scheduled to begin delivery of 27.5 billion cu m/year of gas in fourth quarter 2011, assuming that it wins approval from Finland, Sweden, and Denmark by yearend.

That assumption hit a potential snag on July 1 when Swedish Ambassador to Belarus Stefan Eriksson said the European Union will announce its official opinion about the construction of the Nord Stream gas pipeline in August.

Eriksson said the EU is analyzing the possible environmental consequences of the pipeline's construction and will announce its attitude toward construction after its analysis is complete. He added that Latvia, Lithuania, and Estonia all object to the pipeline’s construction.

Meanwhile, GDF Suez SA will receive 9% in the Russian-led Nord Stream gas pipeline project, according to Gazprom Chief Executive Officer Alexei Miller, who last week said that the German participants of the project, Wintershall and E.On Ruhrgas, have agreed to transfer a total of 9% from their stakes to GDF.

Since then, Gazprom said it is preparing to hold detailed negotiations regarding the terms on which GDF Suez may invest in the project.

GDF Suez is said to be asking for extra volumes of gas for its electrical power stations in France, as well as a seat on the project operator's board of directors.

For its part, Gazprom is prepared to grant the French company's wishes in exchange for a corresponding stake in GDF Suez's liquefaction plants or regasification terminals.

"I'm assuming that their participation level will be similar to that of Gasunie, on comparable terms," said Gazprom Deputy Chief Executive Officer Alexander Medvedev on June 26.

Nederlandse Gasunie received a 9% stake in Nord Stream in 2008 in exchange for a 9% stake in the Balgzand Bacton Line gas pipeline, along with the right to use Gasunie's gas transport capacities in Holland.

Currently, Gazprom holds 51% in Nord Stream, Wintershall and E.On Ruhrgas hold 20% each, and Nederlandse Gasunie holds 9%.

Contact Eric Watkins at hippalus@yahoo.com.

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