German natural gas companies Wingas GmbH and E.ON Ruhrgas have received the first of two required approvals to build a northern German gas pipeline project that aims to link the Baltic Sea transit pipeline Nord Stream to the German grid.

In an emailed statement project leader Wingas--a 50-50 joint venture between BASF SE's (BAS.XE) Wintershall AG and Russian gas monopoly Gazprom OAO (GAZP.RS)--said the companies have received the green light from authorities in the state of Mecklenburg-West Pomerania.

Construction work can begin as early as March, the company added.

A person familiar with the project said that the second required approval from authorities in the state of Lower Saxony is expected to be granted later this week.

Wingas and E.ON Ruhrgas--a unit of E.ON AG (EOAN.XE)--are building the pipeline known as NEL with Nederlandse Gasunie NV of the Netherlands . A Belgian gas pipeline operator is also expected to join the project.

NEL is a planned 440-kilometer pipeline that will connect the Nord Stream Baltic Sea transit pipeline, which is currently under construction, to the German gas grid.

The NEL consortium had previously said it expects the pipeline to cost around EUR1 billion.

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