The capacity of Nord Stream doubles today
Today the 2nd branch of the Nord Stream pipeline will be launched, it will double the capacity of the gas pipeline – up to 55 bln cubic meters a year.
The first stage was launched on November 8th 2011. The shareholders of the Nord Stream project are Gazprom (51%), Wintershall Holding and E.ON Ruhrgas (15.5% each), GDF Suez and Gasunie (9% each).
The Nord Stream pipeline is an extremely new route for the export of the Russian gas to Europe. The gas pipeline with the length of 1.22 thousand km goes via the bottom of the Baltic Sea from Russia (Vyborg) to Germany (Greiswald). Before the launch of this route the Russian gas had been shipped to the Western Europe by 2 routes – via the territoryof Belarus and then Poland and via the Ukraine and then Slovakia. 2/3rds of the supplies were held by the latter route. With the start of the 1st branch of the Nord Stream pipeline the gas from Russia started to be shipped directly to Germany and other countries in the Western Europe, which was supposed to lead to the transit fall via the Ukraine and Slovakia.
The transit of the natural gas via the Ukraine to the Western Europeon the results of 8 months 2012 fell 22.86% against the same period 2011 – to 54 bln cubic meters. In November 2011 – October 1st 2012, 8.7 bln cubic meters of gas were exported by the Nord Stream.
The route of the Nord Stream gas pipeline goes via the exclusively economic areas of Russia, Finland, Sweden, Denmark and Germany as well as via the territorial waters of Russia, Denmark and Germany. The construction of the 1st pipeline started in April 2010 and was over in June 2011. The construction of the 2nd branch started in May 2011. Its construction was over beforehand – on April 18th.
The project was started in 2005. It was given the name of the North European Gas Pipeline and its structure was planned to contain the land areas as well. Gazprom and BASF and E.on on September 8th 2005 signed the agreement on the construction of the North European Gas Pipeline. In conformity with the agreement, the partners founded a German-Russian JV for the construction of the gas pipeline - North European Gas Pipeline Company. Gazprom held 51% in its capital, the partners – 24.5% each. On December 9th 2005 in the town of Babaevo of the Vologda region the first joint of the Russian land site of the North European Gas Pipeline was welded.
However, the technical conception of the project was finally agreed in October 2006, then it was renamed into the Nord Stream and the project was decided to comprise the sea part only. The company-operator was named Nord Stream AG and was registered in Switzerland. In November 2006 the process of the construction agreement with all the countries, via the waters of which the pipeline went trough, started.
In November 2007 Gasunie (the Netherlands) joined the project, it obtained 9%. In the summer 2010 GDF Suez (France) entered the project with the same stake. The agreement of the gas pipeline’s route with all the countries was over in February 2010 when Finland issued the last permission. Denmark, Sweden, Germany and Russia issued the permissions in 2009. Only the Baltic States were against. According to them, the pipeline from Russia to Germany is not to go via the bottom of the Baltic Sea but via land. However, it couldn’t influence anything.
The total investment amount into the Nord Stream makes up €7.4 bln. But the financial director of Nord Stream, Paul Corcoran said earlier as the company hopes to start making profit by the end of 2011, and during this time it has to pay the interest to the shareholders and salaries, the total capital investment might make up €9 bln. However, Mr. Corcoran said that after the company starts making profit, it will meet the initial budget. The shareholders provided 30% of the project’s budget proportionally their stakes in the consortium. The other 70% were attracted from the outer sources – banks and export-credit agencies – in the form of the project financing. The financing attraction was held in 2 stages. For the first stage of the project the necessary amount of €3.9 bln was attracted in March 2010, the financing at the volume of €2.5 bln for the 2nd stage was over in March 2011.
In May 2012 the shareholders ordered the operator of the Nord Stream to study within 8 months the opportunity of the construction of another 1-2 branches. In June the head of Gazprom, A. Miller, said that the gas holding has already made a decision on the worthiness of the construction of another 2 branches of the Nord Stream, and one of them might reach Great Britain. According to him, the membership of the participants of the project might be different from the current membership of shareholders of Nord Stream AG. Mr. Miller said that the interest in the construction of the branch to Great Britain was shown from the part of BP.
The head of Gazprom assumed that by the branch, which will go to the continental Europe, the membership of the shareholders will be the same, but as for the 4th branch – it might be different. According to him, the configuration might be different, it will also depend on the route – via the Baltic Sea to Germany or via the North Sea to Great Britain. He said that at various sites the membership of the shareholders might differ.
The decisions on the construction of the additional capacities via the bottom of the Baltic Sea will be made by the end of 2012, Mr. Miller said.
In late December 2011 he said that the holding within the coming months would start the development of the technical and economic assessment of the 3rd and 4th branches of the Nord Stream which will allow to reach the total export by the pipeline to 110 bln cubic meters of gas a year.
Gazprom has said many times that the Ukraine after the launch of the South Stream and the expansion of the Nord Stream will be of no importance for the export of the Russian gas. The Government of Russia on the background of difficult gas negotiations with the Ukraine, which is trying to have the price reduction for fuel, and the unapproved collection of the transit Russian gas by the Ukraine in February, ordered Gazprom to accelerate the realization of the South stream project and construct this sea gas pipeline at the maximum capacity – 63 bln cubic meters of gas a year. The construction of this route will start in December 2012.
http://www.vz.ru/news/2012/10/8/601499.html
Translated by Galiya Musabekova
