Nord Stream (Северный поток, Nordeuropäische Gasleitung, Gazociąg Północny; former names: North Transgas and North European Gas Pipeline; also known as the Russo–German gas pipeline or the Baltic Sea gas pipeline) is a planned natural gas pipeline from Russia to Germany by the company Nord Stream AG. The name of Nord Stream refers usually to the offshore pipeline between Vyborg, Russia, and Greifswald, Germany, but sometimes it may have wider meaning, which includes the onshore pipeline in Russia and further connections in Western Europe.
The project, which is pushed forward by Russia and Germany, is highly controversial both for environmental concerns and national security risks in some countries such as Poland and the Baltic states, which favour overland pipelines across their countries' territories.
In April 2001, Gazprom, Fortum, Ruhrgas and Wintershall adopted a statement regarding a joint feasibility study for the pipeline. On 18 November 2002, the Management Committee of Gazprom approved a schedule of project implementation. In May 2005, Fortum withdrew from the project and sold its 50% stake in North Transgas to Gazprom. As a result, Gazprom became the 100% owner of North Transgas Oy.
On 8 September 2005, Gazprom, BASF and E.ON signed a basic agreement on the construction of a North European Gas Pipeline. On 30 November 2005, the North European Gas Pipeline Company (later Nord Stream) was incorporated in Zug, Switzerland. On 9 December 2005, Gazprom started construction of the Russian onshore section of the pipeline. On 30 March 2006, the shareholders’ committee of the North European Gas Pipeline Company held its first meeting. On 4 October 2006, the pipeline and the operating company were officially renamed Nord Stream. After establishment of Nord Stream AG, all information related to the pipeline project, including results of the seabed survey of 1998, were transferred from North Transgas to the new company, and on 2 November 2006, North Transgas was officially dissolved.
The environmental impact assessment procedure started on 16 November 2006 with notification sent to the countries around the Baltic Sea. In spring 2007 the Finnish authorities requested the consortium to survey more southern route of the pipeline because of environmental and geological conditions. Based on this request, on 31 May 2007, Nord Stream AG filled an application to carry out the survey in Estonian waters. On 20 September 2007, taking into account sovereignty in its territorial waters, and because the results of drilling work on the continental shelf would give information about Estonia's natural resources and their possible use, the Government of Estonia rejected the seabed survey application. Because of the disputed territory between Denmark and Poland, on 21 August 2007 Nord Stream AG decided to re-route the pipeline to run north of Bornholm instead of the southern route. However, on 4 December 2007, Danish authorities asked to consider an alternative route to the east and south of Bornholm because of shipping safety, so the route around Bornholm is still open.
On 19 March 2007, Nord Stream AG mandated Snamprogetti for detailed design engineering of the gas pipeline. A letter of intent for construction works was signed with Saipem on 17 September 2007 and the contract was concluded on 24 June 2008. On 25 September 2007, the pipe supply tender was awarded to the pipe producers EUROPIPE and OMK, and on 18 February 2008 the concrete weight coating and logistics services agreement was awarded to EUPEC PipeCoatings S.A. The agreement to take N.V. Nederlandse Gasunie to the consortium as the fourth partner, was signed on 6 November 2007. On 10 June 2008, Gasunie was included in the register of shareholders.
On 21 December 2007, Nord Stream AG submitted application documents to the Swedish government for the pipeline construction in the Swedish Exclusive Economic Zone. On 12 February 2008, the Swedish government rejected the consortium's application which it had found too incomplete to take a stance on. Sweden's environment secretary Andreas Carlgren said the consortium needs to describe the environmental consequences along the entire stretch of the proposed pipeline and put forward an alternative where the pipe is not built under the sea, and also describe the option where the gas pipeline is not built at all. The demands are likely to delay the project.
In August 2008, Nord Stream AG hired former Finnish prime minister Paavo Lipponen as a consultant to help speed up the application process in Finland and to serve as a link between Nord Stream and Finnish authorities.
The plan is to build two parallel gas pipeline legs each with capacity of 27.5 billion cubic meters (bcm) per year. The diameter of the pipe will be , the wall thickness and the working pressure . The first leg to be built in 2010-2011 and the second one in 2011-2012. The first gas delivery is scheduled for late 2011. The original project foresaw a 30 by 30 meters (9,500 ft square) service platform in the Swedish economic zone, to north-east of Gotland island. However, in April 2008 Nord Stream AG announced that the advanced technology allows to maintain the pipeline without the mid-point service platform and the platform will not to be constructed.
The design engineering of the subsea pipeline is being done by Snamprogetti and the pipeline will be constructed by Saipem. The pipes for the first leg of the pipeline will be provided by the German company EUROPIPE, and the Russian pipe mill OMK. Concrete weight coating and logistics services will be provided by EUPEC PipeCoatings S.A. For the concrete weight coating new coating plants to be constructed in Mukran (Germany) and Kotka (Finland). Pipe coating is scheduled to start in Mukran in January 2009 and in Kotka in March 2009. For the construction period, Nord Stream AG is planning to create a logistic center in Gotland. For this purpose Nord Stream AG is ready to finance the reconstruction of the Slite harbor for using it as the main interim stock yard. Other interim stock yards to be located in Mukran, in Kotka, in Hanko (Finland) and in Karlshamn (Sweden).
However, the German regulator has agreed to grant permits for construction of NEL and OPAL pipelines only if they are constructed as a part of a natural gas transmission grid with access given to third parties — something that is opposed by Nord Stream's partners. For the same reason, a similar problem faces Gazprom's plan to build a 0.5 bcm underground gas storage facility in the Campine area, near Antwerp, which was designed to ensure Russian gas deliveries to Western Europe and was planned to be used in connection with the Nord Stream.
Nord Stream will be fed additionally from fields in Yamal Peninsula, Ob-Taz bay. Gazprom has also indicated that the majority of gas produced at the Shtokman field would be sold to Europe via the Nord Stream pipeline. For this purpose, the pipeline from the Shtokman field via Kola peninsula to Volkhov or Vyborg in the Leningrad Oblast has to be built.
On 16 June 2006 Gazprom and Danish DONG Energy signed a 20 year contract for delivery of 1 bcm Russian gas annually to Denmark with the option to increase the annual quantities. Under the agreement, Gazprom will start supplying gas in 2011. In addition, DONG Energy will start supplying 0.6 bcm natural gas annually to the Gazprom's subsidiary in the United Kingdom Gazprom Marketing and Trading. Gazprom Marketing and Trading will be supplied also directly through the Nord Stream pipeline.
On 29 August 2006 Gazprom and E.ON Ruhrgas signed an agreement to extend current contracts on natural gas supplies and have signed a contract for an additional 4 bcm of annual gas supply through the Nord Stream pipeline.
On 19 December 2006, Gazprom and Gaz de France agreed to an additional 2.5 bcm gas supply via the Nord Stream, starting from the end of 2010.
Nord Stream pipeline will also supply a planned 1200 MW gas-turbine power station near Lubmin, Germany. The power station will be jointly constructed and operated by Gazprom and E.ON.
Approximately 30% of the financing will be through equity provided by shareholders in proportion to their stakes in the project, while 70% will be from external financing by banks. The financial advisers for external financing are Société Générale, ABN Amro and Dresdner Kleinwort. The European Investment Bank (EIB) has been considered as one possible major financing partner. However, according to the President of the EIB Philippe Maystadt, EIB funding is unlikely because of opposition from several member states.
Originally Nord Stream AG wanted the work on the environmental impact assessment report to be finished by mid-2007 and to get the final environmental impact assessment approval at the beginning of 2008. These expectations had been called "extremely optimistic" by Finnish environmental authorities, and Swedish environmental authorities have said that environmental work might not be able to be carried out in 2007 as approval for the tests was required from all the countries bordering the Baltic Sea through which the pipeline will pass. The new date for the environmental impact report was scheduled in April 2008. However, also this deadline was missed and according to the Minister of Environment of Finland, the new deadline would be probably January 2009.
Russia's Federal Service for Ecological, Technical and Atomic Safety (Rostekhnadzor), said on 5 April 2007 that it had found both the Russian onshore and offshore sections of the route environmentally safe.
Opponents have seen the pipeline as a move by Russia to bypass traditional transit countries (currently Ukraine, Slovakia, Czech Republic, Belarus and Poland). Some transit countries are concerned that a long-term plan of the Kremlin is to attempt to exert political influence on them by threatening their gas supply without affecting supplies to Western Europe. The fears are strengthened by the fact that Russia has so far refused to ratify the Energy Charter Treaty. Critics of Nord Stream say that Europe could become dangerously dependent on Russian natural gas, particularly since Russia could face problems meeting a surge in domestic as well as foreign demand.
The Russian response has been that the pipeline will increase Europe’s energy security, and that the criticism is caused by bitterness about the loss of significant transit revenues, as well as the loss of political influence that stems from the transit countries' ability to hold Russian gas supplies to Western Europe hostage to their local political agendas. It would reduce Russia's dependence on the transit countries as for the first time it would link Russia directly to Western Europe. According to Gazprom, the direct connection to Germany would decrease risks in the gas transit zones, including the political risk of cutting off Russian gas exports to Western Europe.
German weekly Stern has reported about the controversy concerning the monitoring system of the pipeline. There are concerns that the fiber optic cable and repeater stations along the pipeline could theoretically used also for espionage. Nord Stream AG asserts that a fiber-optic control cable was neither necessary nor technically planned. At the same time Canadian company Fox-Tek has reported to have a negotiations with Gazprom to provide a cable to the Nord Stream pipeline. Deputy Chairman of the Board of Executive Directors of Gazprom Alexander Medvedev has dismissed these concerns, stating that "Some objections are put forward that are laughable— political, military or linked to spying. That is really surprising because in the modern world ... it is laughable to say a gas pipeline is a weapon in a spy war."
Some have queried whether any savings will be gained, as the maintenance costs of a submarine pipeline are significantly higher than for an overland route. In 1998, former Gazprom chairman Rem Vyakhirev claimed that the project was economically unfeasible. This estimation may not be valid anymore as the price of natural gas and construction costs have been changed since then.
The impact on bird and marine life in the Baltic Sea is also a concern, as the Baltic sea is recognized by the International Maritime Organization as a particularly sensitive sea area. According to Ene Ergma, Speaker of the Parliament of Estonia, the pieline work will entail ripping a canal in the seabed which will demand leveling the sand that lies along the way, atomizing volcanic formations and fill ditched along the bottom of the sea, changing by this the sea currents. Russian environmental organizations warn that the ecosystem in the Eastern part of the Gulf of Finland is the most vulnerable part of the Baltic Sea and assume damage to the island territory of the planned Ingermanland nature preserve as a result of laying the pipeline. Swedish environmental groups are concerned that the pipeline is planned to pass too closely to the border of the marine reserve near Gotland. Also Greenpeace is concerned that the pipeline would pass through several sites designated marine conservation areas.
The World Wide Fund for Nature (WWF) requested that countries party to the Baltic Marine Environment Protection Commission (HELCOM) safeguard the Baltic marine habitats, which could be altered by the implementation of the Nord Stream project. Furthermore, Estonian scientist and former politician Endel Lippmaa raised concerns over the pipeline's planned path crossing zones of seismic activity in the Baltic Sea, while in April 2007, the Young Conservative League of Lithuania started an online petition entitled "Protect the Baltic Sea While It’s Still Not Too Late!", translated into all state languages of the countries of the Baltic region. On 8 July 2008, the European Parliament endorsed by 542 votes to 60 a non-binding report calling on the European Commission to evaluate the additional impact on the Baltic Sea caused by the Nord Stream project.
Russian officials have described these concerns as far-fetched and politically motivated by opponents of the project. They argue that during the construction the seabed will be cleaned, rather than endangered. Russian Foreign Minister Sergey Lavrov has claimed that Russia fully respects the desire to provide for the 100% environmental sustainability of the project and that Russia is fully supportive of such an approach, and that all environmental concerns would be addressed in the process of environmental impact assessment. Also, Nord Stream has stated that there is no legal basis for an independent report on the impact on the environment, as demanded by several non-governmental organizations.
Concerns have raised, that Nord Stream AG was planning on rinsing out the pipeline with 2.3 billion liters of a solution containing glutaraldehyde, pumped directly into the Baltic Sea when the procedure was finished. Nord Stream AG responded that while it had indeed considered using glutaraldehyde, further study has shown that it would not have to be employed, and even had the chemical been used, the effects would have been brief and localized due to the speed with which the chemical breaks down once it comes in contact with water.
One of the raised problems is that the Gulf of Finland was mined during the World War II, with many mines still on the sea. Critics of the pipeline have voiced fears that the pipeline would disturb ammunition dumps. On 29 February 2008, Nord Stream AG reported that they had detected about ten mines in the Exclusive Economic Zone of Finland. The Finnish navy has confirmed they lack resources to sweep the mines, but would offer to help identify them.