Exclusive: Denmark’s Nord Stream 2 route request could cause eight-month delay, cost 660 million euros – operator

 

COPENHAGEN/MOSCOW (Reuters) – A Russian-led gas pipeline project across the Baltic Sea to Europe could be delayed by up to eight months and cost an extra 660 million euros ($740 million) due to hurdles in securing the necessary permits from Denmark, the pipeline operator has said.

The United States and several eastern European, Nordic and Baltic countries, which say the conduit will increase Europe’s reliance on Russian gas.

Gazprom has completed more than 70% of Nord Stream 2 but since April 2017 has had pending applications with Danish authorities to lay between 147 and 175 km via Danish waters.

Nord Stream 2, aimed at doubling the annual capacity of the existing Nord Stream pipeline by adding 55 billion cubic metres, is to run via the waters of Finland, Sweden, Denmark and Germany. It has approvals from all countries whose waters it crosses apart from Denmark.

The Russian-led company submitted two route applications with the Danish authorities, of which the first was proposed more than two years ago. In March, the Danish Energy Agency requested an environmental assessment of a third route option.

Nord Stream 2 labeled the third route request “a deliberate attempt to delay the project’s completion”.

“Delaying the project will result in a significant financial loss for Nord Stream 2,” the letter said, asking the Danish Energy Board of Appeal to nix the energy agency’s request.

NO MORE VETO

Nord Stream 2 told Reuters it had informed the Danish Energy Agency about the potential impact of delays on costs and the project schedule, but declined to confirm the figures contained in the letter.

In June, Nord Stream 2 withdrew its initial 2017 application for a route through Danish territorial waters south of the Baltic island of Bornholm.

Denmark could have vetoed the initial route. The country passed a law in 2017 that would allow it to ban the pipeline from passing through its territorial waters on security grounds.

However, no veto can be applied for the two remaining route options as they would steer the pipeline through Denmark’s exclusive economic zone, not its territorial waters.

According to Reuters calculations based on Nord Stream 2 data and the speed of construction, Gazprom’s pipe-layers will reach the Danish exclusive economic zone between three and five months from now.

Nord Stream 2 said in May the project may be launched in 2020 rather than the end of 2019 due to delays in obtaining permits from Denmark.

Russian Energy Minister Alexander Novak said last month that Moscow had offered Kiev a short-term gas transit deal to substitute the current 10-year contract after it ends this year.

 

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