Gazprom's Nord Stream Pipeline May Face More Delays

Business Materials 10 November 2007 03:17 (UTC +04:00)

OAO Gazprom's Nord Stream pipeline under the Baltic Sea may face additional delays unless it meets the highest ecological safety standards, the environment ministers of Sweden and Finland said.

``It's definitely not just a formal process,'' Swedish Environment Minister Andreas Carlgren said in an interview in Moscow today. ``We will scrutinize what the effects will be.''

Nord Stream, a planned 1,200-kilometer (750-mile) gas pipeline linking Russia to Germany, needs the approval of five Baltic Sea countries before it can be built. Construction of the pipeline, which will increase Gazprom's gas export capacity to Europe by a third, has already been delayed by a year because of environmental concerns.

The licensing process for a project the size of Nord Stream typically takes as long as three years, Finnish Environment Minister Kimmo Tiilikainen said in a separate interview today.

``It depends on what kind of comments or complaints the different stakeholders declare,'' Tiilikainen said. ``They must be taken into consideration according to our legislation. It's very difficult to estimate the time.''

The Nord Stream venture plans to submit environmental impact assessments and permit applications to the five countries -- Russia, Finland, Sweden, Denmark and Germany -- by early next year and start construction a year-and-a-half later, in July 2009.

``We know their hope,'' Tiilikainen said after he and Carlgren attended a regional conference at the Russian Natural Resources Ministry. ``The better they do their work, the quicker the issue will be handled.''

In September, Estonia rejected a Finnish proposal to move the pipeline into its economic zone. Last week, the Swedish Environment Ministry said the route proposed by Nord Stream may hurt fishing and stir up World War II-era munitions littering the seabed.

``We expect them to present us with alternative routes,'' Carlgren said. ``It's up to them to deliver an application with sufficient quality.''

Nord Stream's application for permits will be considered ``strictly'' under Swedish environmental law and international conventions, Carlgren said.

Nord Stream's Managing Director Matthias Warnig insists the project is still on schedule. Even though construction has been pushed back by about a year, Nord Stream will still be able to deliver its first gas to Germany by the end of 2010, he said earlier this week.

Spokesman Jens Mueller said it will be possible to finish the licensing procedure by July 2009 because Nord Stream has been cooperating with the authorities in Finland for more than a year.

``We're not starting at zero, so we're optimistic,'' Mueller said by phone today. ``A lot of public hearings have taken place, so many new questions can't come up.''

Nord Stream says it has already received 129 statements on environmental and legal issues from authorities and non- governmental organizations in the Baltic Sea region.

Nord Stream is convinced it can persuade Sweden that the planned route is the safest, Mueller said.

``As far as the munitions are concerned, our route is 100 percent optimal,'' he said. ( Bloomberg )