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Gazprom: building one or two extra Nord Stream strings advisable

February 05, 2014, 21:42 UTC+3 MOSCOW
1 pages in this article

MOSCOW, February 05, /ITAR-TASS/. It would be economically advisable and justified to build one or two additional strings of the Nord Stream gas pipeline, Gazprom CEO Alexei Miller said at a meeting with Nord Stream AG Managing Director Mathias Warnig on Wednesday, February 5.

Gazprom reviewed the feasibility study prepared by Nord Stream AG and the conclusions made during consultations with government agencies, NGOs and other interested parties in the Baltic Sea states.

The study confirmed that the construction of one or two additional strings of the pipeline would be economically advisable and possible technically and environmentally as well as in terms of raising funding in the banking market.

Several possible routes were considered as the basis for further surveys and optimisation. The study also revealed the need for greater gas supplies to the European markets in the long term.

The Nord Stream pipeline transported 23.77 billion cubic metres of natural gas in 2013, Gazprom said.

In the third quarter of 2013, the pipeline carried 5 billion cubic metres of gas.

The income of the pipeline operator, Nord Stream, in the first nine months of last year dropped by 41.3 percent to 2.21 billion roubles versus 3.761 billion roubles in 2012.

Gazprom owns a 51 percent stake in Nord Stream Company.

The Nord Stream gas pipeline is a fundamentally new route for Russian gas exports to Europe. The target markets for gas supplies via Nord Stream are Germany, Great Britain, the Netherlands, France, Denmark and others.

The new gas pipeline is extremely significant for meeting the increasing natural gas demand in the European market. Gas imports to the EU are anticipated to grow in the coming decade by nearly 200 billion cubic meters or more than 50 per cent. Due to a direct connection between the world’s largest gas reserves located in Russia and the European gas transmission system, Nord Stream will be able to satisfy about 25 percent of this extra demand for imported gas.

In this regard, back in December 2000 the European Commission assigned the Nord Stream project the Trans-European Network (TEN) status which was confirmed once again in 2006. This means Nord Stream is a key project aimed at creating crucial cross-border transport capacities with a view to ensure sustainability and energy security in Europe.

There are no transit countries for Nord Stream. This reduces Russian gas transmission costs and eliminates any possible political risks. Nord Stream will provide customers in Western Europe with the most reliable gas deliveries.

Nord Stream will link Russia’s Baltic Sea coast near Vyborg with Germany’s Baltic Sea coast in the vicinity of Greifswald. The pipeline is 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 was considered 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 receives natural gas from the Unified Gas Supply System of Russia.

The Yuzhno-Russkoye oil and gas field will be a key resource base for gas supplies via the pipeline. The Nord Stream will also export gas from the Yamal Peninsula, Ob and Taz Bays, Shtokman field.

The Nord Stream project is implemented by Nord Stream AG, a joint venture set up for designing, constructing and further operating the offshore pipeline.

At present, the Nord Stream AG shareholding structure is as follows: Gazprom (51 percent), Wintershall Holding (BASF subsidiary) and E. ON Ruhrgas (15.5 percent each), Gasunie and GDF Suez (9 percent each).

The 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.

In April 2012 the second string of the Nord Stream gas pipeline was placed ahead of schedule. A festive ceremony dedicated to commissioning the second string took place on October 8, 2012 in the Portovaya Bay, the Baltic coast of Russia.

The annual gas throughput of Nord Stream will be 55 billion cubic metres after its two strings reach their design capacity.

The entire gas volume to be supplied under the project has been contracted out by major international energy companies.

The Nord Stream project participants consider the possibility of the third and the fourth gas pipeline strings construction.

In October 2012 Nord Stream shareholders examined the preliminary results of the feasibility studies for construction of the third and fourth strings and came to a conclusion that their construction was economically and technically viable.

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