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6 Nov, 2009 11:38

Scandinavian Nord Stream approvals bring construction closer

Russia is a step closer to bypassing disputes involving gas transit nations with Nord Stream, after key approvals were granted by Sweden and Finland on Thursday.

The two nations were the last except Germany and Russia – the key drivers of 1220 kilometre submarine gas link between the two nations – along the route to grant approvals to use their exclusive economic zones, after Denmark gave its OK on October 20.

Sweden granted final approval after nearly 2 years of analysis the proposed route, sea bed debris, sunken vessels, fish migration zones and breeding areas, with Environment Minister, Andreas Carlgren, emphasising that Gazprom had provided all relevant details asked of it, and that Swedish Authorities "could not find anything in them, which would run counter to the current legislation, both international and Swedish.”

Finland gave approval for Nord Stream to cross its exclusive economic zone, leaving only environmental clearance – expected by early 2010 – from a Finnish regional authority, before construction can commence.

Aleksandr Medvedev, Deputy Chairman of Gazprom, the major shareholder in Nord Stream, says the project has come a long way, noting that the approval process from Russia and Germany would be every bit as exacting as that for the Scandinavian nations.

“It was a long way, as we know, and actually we are expecting 2 permissions which are not provided yet – it’s from Germany and from Russia. The job goes in accordance to the schedule, in full compliance with the legislation of both Russia and Germany as it was done with Finland, Denmark and Sweden.”

The Yamal and Shtokman gas fields are expected to provide the bulk of the gas for the €7.4 billion project. Viktor Mishnyakov, Analyst at Uralsib believes their development will get a boost from the Nord Stream approvals gained in the past 2 weeks.

“Russia will accelerate the construction of the pipeline that will join the trunk pipeline system to the Nord stream beginning. Potentially I can even envisage the situation with prices, with economics, goes better, that might even accelerate the development of the Yamal fields.”

If all goes according to plan, 55 billion cubic metres of gas will be piped to Germany and Denmark by 2011.