Nord Stream Project Wins OK From Germany

February 2010 Vol. 237 No. 2

The Nord Stream natural gas pipeline project recently secured the first of two permits it is required to obtain from Germany.

By obtaining permission for construction through German territorial waters, Nord Stream AG has obtained nearly all necessary approvals for the project to move into the construction phase.

Having added approvals from Denmark, Finland, and Sweden — all of which had much stronger reservations to the project in the past — and with Germany and Russia both on board, Nord Stream AG can now move ahead with the next steps in its effort to begin delivering gas in 2011.

Challenges still lay ahead. Poland wants the pipe buried under the Baltic Sea and it is also necessary to ensure adequate financial structure. Both issues could result in delays and additional expenses though it is unlikely these will hinder the overall progress of Nord Stream.

The US$10.6 billion project will consist of two parallel pipelines. The first one will have transmission capacity of 27.5 Bcm/y and is due for completion in 2011. The route of the pipeline was perceived as an alternative solution to the prolonged standoff between Russia and Ukraine over the transit of Russian gas to Europe.