Nord Stream

Significance

The Nord Stream gas pipeline is a fundamentally new route for Russian gas exports to Europe. The target markets for gas supplies via Nord Stream are Germany, the UK, the Netherlands, France, Denmark and others.

The new gas pipeline is extremely significant for meeting the increasing natural gas demand in the European market. Gas imports to the EU are anticipated to grow in the coming decade by nearly 200 billion cubic meters or more than 50 per cent. Due to a direct connection between the world’s largest gas reserves located in Russia and the European gas transmission system, Nord Stream will be able to satisfy about 25 per cent of this extra demand for imported gas.

In this regard, back in December 2000 the European Commission had assigned the Nord Stream project the Trans-European Network (TEN) status which was confirmed once again in 2006. This means Nord Stream is a key project aimed at creating crucial cross-border transport capacities with a view to ensure sustainability and energy security in Europe.

Risk reduction

Nord Stream will ensure sustainability and energy security in Europe

Nord Stream will ensure sustainability and energy security in Europe

There are no transit countries for Nord Stream. This reduces Russian gas transmission costs and eliminates any possible political risks. Nord Stream will provide customers in Western Europe with the most reliable gas deliveries.

Route

The environmental impact assessment is carried out before construction starts

The environmental impact assessment is carried out before construction starts

Nord Stream will link Russia’s Baltic Sea coast near Vyborg with Germany’s Baltic Sea coast in the vicinity of Greifswald. The pipeline is 1,224 kilometers long.

Based on long-term comprehensive analysis of technical, environmental and economic aspects and factors of the European energy security, the offshore route was considered the optimal solution for the new pipeline carrying gas to Europe.

The Baltic Sea waters along Nord Stream were thoroughly examined before starting the pipe placement. As straight as possible, the pipeline route was adjusted, however, with due consideration for special areas, such as environmentally sensitive regions, chemical weapons dump sites, military zones, critical navigation routes and other dedicated areas serving business or recreational purposes. Nord Stream is designed so as not to cross the World War II ammunition dump sites.

Environmental compliance

The Baltic Sea ecosystem is not disrupted

The Baltic Sea ecosystem is not disrupted

Nord Stream is a transnational project and it was constructed in compliance with the international conventions and national legislation of each state, whose territorial waters and/or exclusive economic zone the pipeline crosses.

A detailed environmental impact assessment was performed prior to launching the construction operations.

Nord Stream was built in compliance with the most rigid environmental standards and without the Baltic Sea ecosystem disruption. In order to minimize the environmental impacts, the construction operations were halted for the herring spawning season as well as over the period of migratory birds’ stopover in this region.

Resource base

Nord Stream receives natural gas from the Unified Gas Supply System of Russia.

The Yuzhno-Russkoye oil and gas field will be a key resource base for gas supplies via the pipeline. The Nord Stream will also export gas from the Yamal Peninsula, Ob and Taz Bays, Shtokman field.

Partners

The Nord Stream project is implemented by Nord Stream AG, a joint venture set up for designing, constructing and further operating the offshore pipeline.

At present, the Nord Stream AG shareholding structure is as follows: Gazprom (51 per cent), Wintershall Holding (BASF subsidiary) and E. ON Ruhrgas (15.5 per cent each), Gasunie and GDF Suez (9 per cent each).

Current status

Russian President Dmitry Medvedev

Russian President Dmitry Medvedev

In March 2010 the Nord Stream consortium borrowed external funds totaling EUR 3.9 billion from a syndicate of 26 banks to implement Phase 1 of the project. Export credit agencies SACE and Hermes provided guarantees covering EUR 3.1 billion of the above mentioned amount.

In April 2010 the Nord Stream gas pipeline construction was launched in the Baltic Sea. Three vessels were be engaged between 2010 and 2011 to lay the first string of the gas pipeline: Castoro 6, Castoro 10 and Solitaire.

The Nord Stream’s first string with the throughput of 27.5 billion cubic meters of gas a year was commissioned on November 8, 2011. Commercial supplies of Russian gas to the European Union via Nord Stream’s first string started on that very day.

In April 2012 the second string of the Nord Stream gas pipeline was placed ahead of schedule. A festive ceremony dedicated to commissioning the second string took place on October 8, 2012 in the Portovaya Bay, the Baltic coast of Russia.

The annual gas throughput of Nord Stream will be 55 billion cubic meters after its two strings reach their design capacity.

Portovaya compressor station

Portovaya compressor station

The entire gas volume to be supplied under the project has been contracted out by major international energy companies.

Prospects

The Nord Stream project participants consider the possibility of the third and the fourth gas pipeline strings construction.

In October 2012 Nord Stream shareholders examined the preliminary results of the feasibility studies for construction of the third and fourth strings and came to a conclusion that their construction was economically and technically viable.

One of the strings might be intended for delivering Russian gas to the United Kingdom.