Gazprom Finds Buyers for Half of Nord Stream Pipeline Gas

Gazprom Finds Buyers for Half of Nord Stream Pipeline Gas
Itar Tass
Τρι, 19 Ιανουαρίου 2010 - 17:22
Russia’s natural gas concern Gazprom has already found buyers for half of the volumes of gas that will be supplied to Europe through the North European pipeline Nord Stream, Managing Director of the consortium of companies for the pipeline construction Matthias Warnig told the German economic magazine Euro in an interview.

Russia ’s natural gas concern Gazprom has already found buyers for half of the volumes of gas that will be supplied to Europe through the North European pipeline Nord Stream, Managing Director of the consortium of companies for the pipeline construction Matthias Warnig told the German economic magazine Euro in an interview.

According to him, contracts on the supply of over 21 billion cubic metres of gas a year have been concluded with consumers in Germany , Denmark , France and Great Britain . Among the major gas consumers in Germany are the energy concern E.ON Ruhrgas and a daughter company of Gazprom and Germany ’s concern Wintershall – Wingas. Warnig noted that these enterprises plan during the next 25 years to get, in addition to the currently supplies gas volumes, 9 billion cubic metres of natural gas annually.

The Nord Stream official said that the laying of the 1,200-km pipeline on the Baltic Sea bottom will be started this April. In late 2011, the gas will be pumped through the first line of the pipe from Russia ’s Vyborg to Germany ’s Lubmin near Greifswald . After the putting into operation of the second stage of the pipeline the volume of gas pumping through it from Russia to Western Europe will reach 55 billion cubic metres annually.

Warnig noted that there will be no problems with financing of the project the cost of which is 7.4 billion euros, despite the economic crisis effects. A total of 27 banks will be engaged in the financing of the first phase of the project. Besides, the Nord Stream consortium has requested from the German government state guarantees on credits worth 2.6 billion euros.

Nord Stream is a planned natural gas offshore pipeline from Vyborg in Russia to Greifswald in Germany by the company Nord Stream AG. The name occasionally has a wider meaning, including the feeding onshore pipeline in Russia , and further connections in Western Europe .

The plan for the offshore pipeline is to build two parallel legs each with capacity of 27.5 billion cubic metres (bcm) per year. The diameter of the pipe will be 1,220 millimetres (48 in) and the working pressure 220 bars (22 MPa). The first leg of the pipeline is to be built in 2010–2011 and the second one in 2011–2012. The first gas delivery is scheduled for late 2011.

The original pipeline project started in 1997 when Gazprom and the Finnish company Neste (in 1998 merged with Imatran voima to form Fortum, and 2004 separated again) formed the joint company North Transgas Oy for construction and operation of a gas pipeline from Russia to Northern Germany across the Baltic Sea . North Transgas cooperated with the German gas company Ruhrgas (later E.ON). A route survey in the Exclusive Economic Zones of Finland , Sweden , Denmark and Germany , and a feasibility study of the pipeline was conducted in 1998. Several routes were considered including routes with onshore segments through Finland and Sweden .

On 30 November 2005 , the North European Gas Pipeline Company (later named Nord Stream AG) was incorporated in Zug , Switzerland . On 9 December 2005 , Gazprom started construction of the Russian onshore feeding pipeline. On 4 October 2006 , the pipeline and the operating company were officially renamed Nord Stream. After establishment of Nord Stream AG, all information related to the pipeline project, including results of the seabed survey of 1998, were transferred from North Transgas to the new company, and on 2 November 2006 , North Transgas was officially dissolved.

On 19 March 2007 , Nord Stream AG mandated Italian company Snamprogetti, a subsidiary of Saipem, for detailed design engineering of the gas pipeline. A letter of intent for construction works was signed with Saipem on 17 September 2007 and the contract was concluded on 24 June 2008 . On 25 September 2007 , the pipe supply tender was awarded to the pipe producers EUROPIPE and OMK, and on 18 February 2008 , the concrete weight coating and logistics services agreement was awarded to EUPEC PipeCoatings S.A. The agreement to take N.V. Nederlandse Gasunie to the consortium as the fourth partner, was signed on 6 November 2007 .

On 21 December 2007 , Nord Stream AG submitted application documents to the Swedish government for the pipeline construction in the Swedish Exclusive Economic Zone. On 12 February 2008 , the Swedish government rejected the consortium’s application which it had found too incomplete to take a stance on. On 20 October 2009 , Nord Stream received a construction permit to build the pipeline in the Danish waters. On 5 November 2009 , the Swedish and Finnish authorities gave a permit to lay the pipeline in their exclusive economic zones.

In August 2008, Nord Stream AG hired former Finnish prime minister Paavo Lipponen as a consultant to help speed up the application process in Finland and to serve as a link between Nord Stream and Finnish authorities. This raised concerns about the amount of politicians being paid by Nord Stream, as Gerhard Schroeder, the former chancellor of Germany , is already heading the shareholder's committee.

On January 15, 2010 the construction began on the Portovaya compressor station in Vyborg near the Gulf of Finland , the starting point for the Nord Stream gas pipeline.

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