Under pressure because of environmental and security concerns,
Gazprom, the Russian state-owned energy monopoly, is planning the
first of three re-routings of a controversial pipeline to run under
the Baltic Sea, officials said Thursday, a shift that could cost an
extra EUR 1 billion.
Ever since the pipeline project was started two years ago, it has been racked by difficulties, with numerous countries in Northern and Central Europe raising objections. The planned re-routing hopes to avoid problems involving Denmark, Poland, Finland and Estonia.
Once built, the joint Russian-German project, whose chairman is
the former German chancellor Gerhard Schroder, will allow Russia to
reduce its dependence on the transit countries of Ukraine, Belarus
and Poland. This means Russia would be able to send uninterrupted
supplies of gas to Europe, where it will have guaranteed markets
through long-term sales contracts.
However, it could also increase Europe's dependence on Russian
gas at a time when several EU governments are already concerned
about the bloc's reliance on Russia as one of its main energy
suppliers. The EU imports more than a quarter of its gas from
Russia, with Germany buying as much as 35 percent of its supply from
But the glitches that have arisen since the project, called Nord
Stream, was officially begun by Schroder and the Russian president,
Vladimir Putin, in Berlin in September 2005 mean that the cost of
building the pipeline could increase, according to the company.
Stakes in Nord Stream are divided among Gazprom, which holds the
majority, and Germany's two energy companies, E.ON Ruhrgas and
The cost of the offshore pipeline could increase by EUR 1 billion, or US$1.35 billion, according to Nord Stream officials, bringing the
total to EUR 6 billion. The overall cost of the project--including the onshore pipeline, which includes building a pipeline on Russian and German territory--could cost EUR 12 billion, depending on the world market costs for steel, according to Nord Stream. There could even be delays because of the difficulties in obtaining construction
permits because of the lengthy investigations and hearings into the
environmental risks for the 1,200-kilometer, or 1,900-mile, -long
project, which consists of two parallel pipelines.
Jens Muller, a spokesman for Nord Stream, said this week that the
company had decided to re-route the part of the pipeline that would
have passed between the Danish and Polish parts of the Baltic Sea,
running south of the Danish island of Bornholm. Instead, it will now
run north of Bornholm, adding an additional eight kilometers to the
pipeline's total length. The decision to reroute the pipeline will
minimize environmental impact and avoid munitions dump sites south
of the island of Bornholm, Muller said.
Danish officials said Nord Stream had changed the route because
it wanted to avoid entering a potential political minefield because
of an unresolved border dispute between Denmark and Poland.
"Nord Stream changed the route because there is no border
demarcation between Poland and Denmark," said Brigitta Jacobsen from
the Danish Energy Authority, a division of the Danish Ministry of
Transport and Energy. "Nord Stream did not want to enter an area
with unclear borders."
Re-routing this part of the pipeline will not, however, mean that
offshore construction of the pipeline can begin. Nord Stream is
under pressure to change routes that pass under the waters of
Finland, Estonia and Sweden, according to officials in the region.
"There are two other routes under discussion which involve
Finland and Estonia," said Sten Jerdenius of the Swedish Environment
Ministry, who is one of the main coordinators in the region
monitoring whether the pipeline conforms with UN environmental
The countries affected by the Nord Stream pipeline--Germany,
Denmark, Poland, Sweden, Finland, Latvia, Estonia, Lithuania and
Russia--belong to the UN Espoo Convention, whose member states are
obliged to notify and consult one another on all major projects that
are likely to have a significant environmental impact across
In the case of Finland, its environmental agency wants the
pipeline moved farther south.
"The reason is that the proposed route moves over a lot of
rocks," Jerdenius said. "This would involve a lot of blasting."
Farther south would mean moving into Estonian waters where the sea
bed is flat. That means Nord Stream would have to negotiate for
permits with Estonia, he said.
Another region of dispute is the Swedish island of Gotland. The
Swedish Environmental Protection Agency wants Nord Stream to shift
the pipeline south because the island's banks are internationally
recognized as protected areas. Even if the company agreed to do
this, it could run into problems over munitions dumping sites left
over from World War II.
"This is turning out to be a huge project that involves several
countries, lots of nongovernmental agencies and big environmental
issues," Jerdenius said.
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