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Russia offers long-term gas supply contract to Britain

September 05, 2013, 22:47 UTC+3

In 2012, Gazprom Group supplied 11.7 billion cubic metres of natural gas

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MOSCOW, September 5 (Itar-Tass) - Russian Energy Minister Alexander Novak met with his British counterpart Michael Fallon on Thursday, September 5, to discuss cooperation between the two countries in building the third and fourth strings of the Nord Stream gas pipeline.

Novak said corporate negotiations had to be held before concrete steps were taken to develop pipeline infrastructure, to be followed by long-term gas supply contracts.

A gas seminar the ministers have agreed to organise in London in late October will provide an opportunity to discuss prospects for bilateral cooperation between Russia and Britain and for the development of the European gas market.

Gazprom CEO Alexei Miller met with Fallon at the St. Petersburg International Economic Forum in June of this year to discuss prospects for bigger Russian natural gas supplies to Great Britain.

Fallon said at that meeting that his country is interested in bigger gas supplies from Russia and expressed hope for broader cooperation including in such field as gas storage, power industry and infrastructure projects.

In 2012, Gazprom Group supplied 11.7 billion cubic metres of natural gas to Britain.

Gazprom has been participating in short-term trade in natural gas in Britain since 1999 and increasing gas supplies to that country since then.

Gazprom also supplies gas and electricity to British consumers through its 100-percent controlled company Gazprom Marketing & Trading Ltd. Last year, the company supplied 3 billion cubic metres of gas and 1.8 TWh of electricity.

Gazprom and its British partners are also studying the possibility of building an extra Nord Stream extension to Great Britain.

Nord Stream will link Russia's Baltic Sea coast near Vyborg with Germany's Baltic Sea coast in the vicinity of Greifswald. The pipeline will be 1,224 kilometres long.

Based on long-term comprehensive analysis of technical, environmental and economic aspects and factors of the European energy security, the offshore route is the optimal solution for the new pipeline carrying gas to Europe.

The Baltic Sea waters along Nord Stream were thoroughly examined before starting the pipe placement. As straight as possible, the pipeline route was adjusted, however, with due consideration for special areas, such as environmentally sensitive regions, chemical weapons dump sites, military zones, critical navigation routes and other dedicated areas serving business or recreational purposes. Nord Stream is designed so as not to cross the World War II ammunition dump sites.

Nord Stream is a transnational project and its construction is regulated by the international conventions and national legislation of each state, whose territorial waters and/or exclusive economic zone the pipeline will cross.

A detailed environmental impact assessment was performed prior to launching the construction operations.

Nord Stream will be built in compliance with the most rigid environmental standards and without the Baltic Sea ecosystem disruption. In order to minimise the environmental impacts, the construction operations will be halted for the herring spawning season as well as over the period of migratory birds' stopover in this region.

In September 2011 natural gas was fed into the first string of the gas pipeline. Nord Stream's first string with the throughput of 27.5 billion cubic metres of gas a year was commissioned on November 8, 2011. Commercial supplies of Russian gas to the European Union via Nord Stream's first string started on that very day.

The entire gas volume has already been contracted out by major international energy companies.

Construction of the second string will increase the gas pipeline throughput to 55 billion cubic metres a year. The second string of the gas pipeline will reach the German coast near the town of Greifswald in 2012.

Nord Stream is a fundamentally new route for Russian gas export to Europe. Running under the Baltic Sea from the Portovaya Bay (near Vyborg) to the German coast (near Greifswald), the two-string gas pipeline stretches for 1,224 kilometres and has an annual capacity of 55 billion cubic metres.

The Nord Stream project is implemented by Nord Stream AG joint venture. The stakes in Nord Stream AG are currently distributed as follows: Gazprom holds 51 percent, Wintershall Holding and E.ON Ruhrgas - 15.5 percent each, Gasunie and GDF SUEZ - 9 percent each. GDF SUEZ joined Nord Stream AG as a shareholder in July 2010.

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