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A year of Nord Stream 2 – the project’s current status

Published by
World Pipelines,

At the end of 2015, the Nord Stream 2 pipeline project split the EU. The dispute was between Russia and Europe, where only Germany and the Netherlands saw the benefits of the project.

The Nord Stream 2 pipeline will connect to the existing Nord Stream pipeline, to deliver natural gas to Germany via the Baltic Sea. The proposed project intends to double its existing capacity of 55 billion m3/y. If approved the line will also bypass Ukraine, which has ongoing disputes with Russia, as well as Poland and three other Baltic countries.

At a December 2015 summit, officials thought it would be wise to wait for regulators to rule on the project before investing. However, Gazprom – the operator of the Nord Stream 2 pipeline – argued that if the EU cancels the project, its oil and gas supply would dwindle and negatively affect Europe.

Since then, a lot has happened.

In January 2016, Poland expressed its objection to the project, stating that the line is dictated by politics instead of economical necessity. Similarly, in May 2016, Hungary accused the EU of setting double standards with regards to the project.

At a working meeting in August 2016, Gazprom and OMV discussed Russia natural gas being supplied to Austria and its continued growth. As a result of the increase in gas supplies, during the meeting it was stressed that the Nord Stream 2 pipeline was important for the EU energy system.

Soon after, in early September 2016, Wasco was awarded a contract for the Nord Stream 2 project. The company would provide concrete weight coating, pipe storage and logistics.

With Wasco’s recent contract, Gazprom intended to begin construction before the end of 2016. However, the Polish government has been putting the pressure on the European Commission. Poland is arguing that the offshore pipeline does not conform with EU laws, which would have put the project on hold and reduced Russia’s control over its infrastructure.

Likewise, after Gazprom requested to rent a port site and harbour in Sweden, the Swedish government is reported to have become concerned with the project’s construction activities, stating it could affect the country’s defense policy. Yet, despite the government disapproving, the final ruling lied with the policy makers of Gotland and Blekinge who said no to the leases.

Nevertheless, this did not deter the project. In December 2016, Intertek announced it had been awarded an inspection and expediting framework agreement for Nord Stream 2.

Currently, Gazprom has been considering the energy market and the impacts caused by the events throughout the year. During a recent meeting, it was noted that the Nord Stream 2 pipeline was going according to schedule. The company stated that, despite all the energy impacts in 2016, Gazprom would remain stable in the long-term due to the company’s vast natural gas reserves and export routes. Thus, the company believes the Nord Stream 2 pipeline project will remain a necessity for European customers.

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