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Danish section of Nord Stream-2 can be built in five weeks, says Gazprom Chairman

Alexey Miller recalled that commissioning will also be required and noted the capital costs that are needed to build a gas pipeline, without the cost of financing, have already been financed by 80%

ST.PETERSBURG, June 7. / TASS /. The Danish section of the Nord Stream-2 gas pipeline can be built in a maximum of five weeks, regardless of the route, the deadline for issuing a permit and observing the construction schedule has not yet come, Gazprom Chairman Alexey Miller told reporters at the St. Petersburg International Economic Forum on Friday.

"The elections were held in Denmark, the new government is being formed. The section that is in Denmark, it is very short, it is approximately 130 km. That is at most 5 weeks’ worth of work. I know this time frame, but I’m not going to tell you, but I can say that it's not today, and it’s not tomorrow either," said Miller said, answering the question when is the deadline for Denmark to give its construction permit in order to complete the project by the end of 2019.

Miller noted that it is necessary to bear in mind that commissioning will also be required. At the same time, he noted "the capital costs that are needed to build a gas pipeline, without the cost of financing, have already been financed by 80%. "From the point of view of length, 57.2%, and every day more and more, it’s already, nearly two thirds. All our partners who were at the forum have all confirmed their participation," he added.

At the end of May, Gazprom's deputy head of the foreign economic activity department, Alexey Miroshnichenko said that the company is working on reducing the negative impact of Denmark’s position regarding the construction of the Nord Stream-2 gas pipeline and at the same time disputes the requirement of the Danish Energy Agency to submit a third application for its route. "Gazprom, including the project company, is currently working on those possible measures to reduce the negative impact of the situation around Denmark on the overall project implementation schedule. At the same time, I want to note that the project company on April 17 filed an appeal against the decision of Denmark to explore the third route in addition to the two routes already investigated. Therefore, we are working in two directions, "said Miroshnichenko.

Earlier, the DEA asked the project operator to include in the environmental assessment of the projects the option of laying the pipeline in the Danish exclusive economic zone south of Bornholm.

The need to find an alternative route to the Nord Stream 2 is due to changes in Danish legislation. In 2017, Denmark adopted amendments to the law on the continental shelf. Under the amended law, Denmark’s Foreign Ministry has the rights to reject an application for the construction of a pipeline in the country's territorial waters. As for the proposed alternative option, the construction of the gas pipeline in this case is regulated by the UN Convention on the Law of the Sea, so the Danish Foreign Ministry will no longer be able to block the project.

Nord Stream 2 already has two pending applications with the DEA.

In April 2017, Nord Stream 2 applied for the route based on the guidance received from Danish authorities for the existing Nord Stream Pipeline - this base case route crosses territorial waters to the south of Bornholm.

In January 2018, the amended Danish Continental Shelf Act entered into force with retroactive effect only for the Nord Stream 2 project. The law gave the Danish Minister of Foreign Affairs the right to veto infrastructure projects running through territorial waters on political grounds.

"Such a judgement from the Ministry of Foreign Affairs has now been pending for 16 months. Nord Stream 2 AG has not received any response at all," the company noted.

In August 2018, after eight months without any indication of the timing of the Minister of Foreign Affairs recommendation, Nord Stream 2 was therefore forced to apply for a second, alternative route outside Danish territorial waters, north-west of Bornholm through the Danish EEZ.

According to the operator, "both permitting processes, which included consultations with the public and expert authorities, nationally and internationally (the so-called Espoo procedure), have shown that all technical and environmental prerequisites are fulfilled and a construction permit could be granted for either route.

The Nord Stream 2 project will consist of two gas pipeline lines with a total capacity of 55 billion cubic meters of gas per year from the coast of Russia through the Baltic Sea to Germany. The total capacity of the project is 55 billion cubic meters of gas per year. The cost of construction is estimated at 9.5 billion euros.

The pipeline will bypass transit countries - Ukraine, Belarus, Poland and other Eastern European and Baltic countries through exclusive economic zones and territorial waters of five countries - Russia, Finland, Sweden, Denmark and Germany. Only Denmark has not issued permission for the construction. Nord Stream 2 AG, the project’s operator, still expects to get the permit from Denmark by the end of 2019.

The sole shareholder of Nord Stream 2 AG is Gazprom. Gazprom's European partners - Wintershall, Uniper, OMV, Engie and Royal Dutch Shell - will finance 50% of the project.

The main shareholder of the company is Andrei Melnichenko, who, through AIM Capital SE, controls 90% of the company's shares, another 10% of the shares are indirectly owned by Dmitry Strezhnev, who previously headed the company.

The 2019 St. Petersburg International Economic Forum is being held on June 6-8. The forum’s motto this year is "Creating a Sustainable Development Agenda". The organizer for SPIEF-2019 is the Roscongress Foundation. TASS is a media partner, the official photo hosting agency and the operator of SPIEF’s presentation zones with support from multinational firm EY, and the Foreign Investment Advisory Council in Russia.