Nord Stream 2 secures Swedish approval

14 June 2018, Week 23, Issue 454

Russia’s controversial Nord Stream 2 project cleared another hurdle last week, after Sweden approved the construction and operation of the pipeline through 510 km of its exclusive economic zone (EEZ).

In a statement on June 7, the Swedish government said it had issued the permit despite opposing the project, which it claims will undermine EU energy security. 

"Our judgement was that we were not able to say no," Swedish Minister for Enterprise and Innovation Mikael Damberg told reporters. 

Nord Stream 2 is set to run 1,230 km along the bed of the Baltic Sea, pumping up to 55 bcm per year of Russian gas to Germany. The project has drawn criticism from a number of EU member states, who argue it will put bloc energy supplies at risk and hand Moscow greater political leverage. 

Germany and Finland approved Nord Stream 2’s construction through their EEZs earlier this year. Last week, the pipeline secured one of two approvals required from the Russian authorities. However, Russia’s Gazprom is still waiting for permission to lay the pipeline through Danish territorial waters. 

In November, Denmark passed a law that could allow it to ban the construction of pipelines through its waters on security and foreign policy concerns. Gazprom responded by suggesting that the pipeline could be rerouted through international waters north of the Danish island of Bornholm. Doing so would incur extra costs and could cause delays, however. 

Nord Stream 2 is expected to start up before the end of 2019, coinciding with the expiry of Gazprom’s long-term transit and supply contracts with Ukraine’s Naftogaz. Russia is hoping to use the pipeline to redirect supplies to its customers in Europe that currently pass through Ukraine. 

Royal Dutch Shell, Austria’s OMV, France’s Engie and Germany’s Uniper and Wintershall are helping to finance the pipeline project, which is slated to cost 9.5 billion euros (US$11.2 billion).

Earlier this month, Gazprom confirmed it had awarded a contract worth 19.2 billion rubles (US$306 million) for the construction of a compressor station near the Russian port of Ust-Luga that will feed gas into Nord Stream 2. The contract was handed to Stroygazmontazh, which has worked on numerous other Gazprom projects over the years. The company is owned by Arkady Rotenburg, a former judo partner of Russian President Vladimir Putin.

Edited by

Ryan Stevenson

Managing Editor

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