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Nord Stream 2 gas project strives to fill EU’s import gap

Gas pipeline from Russia to Germany does not plan to substitute Ukrainian transit, could also supply southern Europe, Nord Stream 2 tells New Europe

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DUSSELDORF – Ukraine can still be a transit gas country to Europe even after the Nord Stream 2 pipeline from Russia to Germany is built, the spokesperson of the company constructing the project, Jens Müller told New Europe.

“From the very beginning of this project, we have underlined that Nord Stream 2 should be an infrastructure capable of transporting additional gas needed because of an increasing import gap and looking into the gas flows for example in 2017,” Müller said during a bus ride from Düsseldorf to Rotterdam on April 9 where he planned to visit The Gate LNG (liquefied natural gas) terminal on April 10.

An interesting fact is that Nord Stream 2 – with a 55 billion cubic meter capacity – can deliver the equivalent of 600-700 LNG tanker loads. Müller noted, however, that Nord Stream 2 couldn’t substitute other gas infrastructures bringing Russian gas to Europe.

According to Müller, gas from Nord Stream 2 could even find its way to southern Europe, including Italy and the Balkans. “As interconnectivity has made a lot of progress, in a few years, gas arriving somewhere in the EU can reach every customer in the EU,” he said.

“Looking at the onshore connection of Nord Stream 2, a big part of the gas will be transported through Germany to the Czech Republic and then further on to other countries in the south,” he added. “The market and the infrastructure will allow molecules flowing to Nord Stream 2 to reach every point in the EU, including the south of Europe.”

Chatting on the latest Nord Stream 2 developments, Müller said that overall the gas pipeline project is implemented according to schedule. “We’ve got two permits in Germany for the territorial waters and Exclusive Economic Zone of Germany. We’ve got the permits from Finland and now we’re expecting permits for the other countries within the next months – other countries meaning, Sweden, Denmark, and Russia,” Müller said, adding, “This should enable us to start construction works as planned in 2018.”

Asked whether Nord Stream 2 can overcome the obstacles from the European Commission and some EU Member States who oppose the project, including Poland, which have argued that Nord Stream 2 might increase dependence on the EU’s major gas supplier Russia, Müller noted that the project is moving ahead despite efforts to block the pipeline’s construction.

“If you look into the intensity and variety of political debates regarding Nord Stream 2 within the last two years, it has intensified in different places like in Brussels and in some countries, but as a matter of fact the project is progressing on the legal basis of national and international law…this is the benchmark phase as a project developer,” Müller said.

Unlike Nord Stream 1, however, Russian gas monopoly Gazprom is the sole shareholder of Nord Stream 2. US sanctions, which included Gazprom CEO Alexei Miller on April 6, could hinder investment in Nord Stream 2 and affect the project’s implementation.

“We do not comment on the political decisions of sanctions. What we’ve seen is a guideline for sanctions which underlines that the United States would not harm the energy security of Europe and that every activity shall be coordinated with the Western allies. This must take account of the contribution by Nord Stream 2 to the security of supply in the future and the fact that five renowned Western European companies are involved in the project. We do not see any impact of the sanctions law,” Müller said in reference to five financial investors that includes France’s ENGIE, Austria’s OMV, Royal Dutch Shell as well as Uniper and Wintershall Holding, both of Germany.

“According to the financial agreements signed with Nord Stream 2 with these five companies, they will finance up to 50% of the CAPEX. That means up to €950 million each,” Müller said. “In addition to this, the companies are trying to optimise the financing process with the involvement of banks,” he said, adding that “with this intention Nord Stream 2 is now in discussions with export credit agencies and will start negotiations with banks within the next months.”

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Co-founder / Director of Energy & Climate Policy and Security at NE Global Media

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