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28 Jun, 2018 17:25

Dane chicane: Russian gas pipe to Europe to be built despite Denmark’s heel dragging

Dane chicane: Russian gas pipe to Europe to be built despite Denmark’s heel dragging

The construction of a Russian undersea gas pipeline to Europe may start as soon as this summer, even without Denmark’s permission, as it could run through international waters, according to Nord Stream 2 CFO Paul Corcoran.

“We are planning to start this summer,” Corcoran told journalists on the sidelines of the World Gas Conference in Washington. “If Denmark doesn’t approve construction and operation in its territorial waters, we’ll have to run the pipeline through transboundary waters north of the country.”

Earlier this year, Danish Prime Minister Lars Lokke Rasmussen said that Denmark was not able to prevent the Russian-led Nord Stream 2 gas pipeline project from being implemented, but could slow down the construction works. The country pledged to pass a law that would ultimately allow it to block or postpone the implementation of the Nord Stream-2 project on legal grounds. Copenhagen is reportedly under considerable pressure from Washington.

Nord Stream 2's top manager added that the company hasn’t filed an application for building the pipeline in multinational waters yet, as Denmark hasn’t issued the refusal so far. The construction works are currently running to plan, according to Corcoran.

“We have received 96 percent of pipes with 55 percent of them were concreted. We have also deployed ships. We are in compliance with the schedule,” he said, stressing that the company is currently in talks on granting financial guarantees for up to five billion dollars.

“We’re negotiating financial guarantees with six export agencies – German Hermes, Italian SACE, Austria’s OeKB, Netherlands’ Atradius, Belgian Credendo and Russia’s EXIAR,” Corcoran said. “We hope to get financial guarantees from the export agencies and start negotiating with banks to raise project funding at the end of the year, or in early 2019.”

The Nord Stream 2 gas pipeline project is seen as the most efficient way, both economically and ecologically, to deliver Russian gas to European consumers. The pipeline is projected to provide transit of 70 percent of Russian gas sales to the EU via the German route when it is built in 2019.

The future pipeline, which is set to run from Russia to Germany under the Baltic Sea, is expected to double the existing pipeline’s capacity of 55 billion cubic meters annually.

The project, led by the subsidiary of Russian energy giant Gazprom, is implemented in cooperation with German energy firms Wintershall and Uniper, French multinational Engie, British-Dutch oil and gas giant Royal Dutch Shell, and Austrian energy company OMV.

Earlier this year, the White House pledged to sanction all the participants of the Russia-led project due to its potential to increase Russia's “malign influence” in Europe.

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