"Nord Stream" found a way to get around Denmark

Nord Stream 2 AG plans to bypass the Danish island of Bornholm through Swedish waters.
Nord Stream 2 AG, the operator of the Nord Stream 2 project, has developed a pipeline construction project that bypasses Denmark, OMV board member Managing Director, including Manfred Leitner, said on August 2: "We have already developed an alternative route, Nord Stream 2 AG no additional permits are needed. " He did not disclose the details, but stressed that this should not lead to a rise in the cost of the project: "The total cost of the project will remain the same as it was said at the launch of the project, it is 9.5 billion euros."

"Nord Stream-2" is a project of a new export gas pipeline with a capacity of 55 billion cubic meters. m, which must pass through the Baltic Sea, connecting Russia and Germany. Nord Stream 2 AG is 100% owned by Gazprom. OMV, together with the French Engie, the British-Dutch Shell and the German Wintershall and Uniper, signed an agreement with Gazprom on financing half the cost of the project.

 A representative of Gazprom redirected questions about the construction of Nord Stream-2 to the project company. His colleague from Nord Stream 2 AG declined to comment on the matter.

The base scenario assumed that the new pipe should repeat the route of the already operating "Nord Stream-1", which involves laying the pipe in the exclusive economic zones (EEZs) of Sweden and Finland, as well as in the territorial waters of Russia, Germany and Denmark. All countries except Denmark have already given their permission.

The possibility of laying a new export pipeline of Gazprom with a deviation from the original route representatives of the project company Nord Stream 2 AG previously allowed. The pipe can deviate more strongly from the Danish island. Bornholm, to pass the EEZ of Denmark, and not through territorial waters, said Nord Stream 2 AG CFO Paul Corcoran.

 Leitner's statement suggests that Nord Stream 2 AG has found a variant of the route that bypasses the waters of Denmark, suggests Dmitri Marinchenko, director of Fitch's corporate department. Theoretically, the pipe can pass within a narrow band of the Swedish EEZ north of. Bornholm up to the borders with the German waters.

"Within the Swedish and German waters, nothing will be changed," retorts the representative of Nord Stream 2 AG.

All other permissions Nord Stream 2 AG has already received. It was assumed that obtaining a Danish permit should not be a problem either. But recently, a law has passed in the country, which gives the decisive word in coordinating the pipeline to the Ministry of Foreign Affairs. Now it can block the project, based on "foreign policy considerations and security concerns".

"The presence of a prescribed alternative on a paper and a calculated alternative route can eventually contribute to the fact that Denmark will" surrender "and issue a permit, since it does not depend on it," Marinchenko supposes. Considering that the construction of the offshore part of the gas pipeline will take at least a year, it becomes critical for Gazprom to determine the final version of the pipeline, the expert says. "Taking into account the start-up activities for the full-fledged launch of the project by the end of 2019, Gazprom needs to start construction in the very near future, possibly by the end of September," Marinchenko said. "Apart from the fact that the start of construction would reduce the likelihood of the project winding down to almost zero, it would also significantly improve Gazprom's position in negotiations with Naftogaz on the [new] transit contract." Current contracts for the supply of gas and transit through Ukraine end in 2019. The parties have already begun negotiations on new ones. The next round of talks is scheduled for October.