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Deals inked to expand Gazprom pipeline to Europe

Nord Stream pipeline to Germany slated to get two more lines.

By Daniel J. Graeber

VLADIVOSTOK, Russia, Sept. 4 (UPI) -- Russian energy company Gazprom strengthened its grip on the European energy sector in a deal with regional partners to expand a Baltic Sea gas pipeline.

Gazprom Chairman Alexei signed a shareholder agreement on the development of the second phase of the twin Nord Stream pipeline system in the Baltic Sea with his counterparts at German energy companies BASF and E.ON, as well as those from French company ENGIE, Austria's OMV and Royal Dutch Shell.

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"Nord Stream 2 will double the throughput of our direct, state-of-the-art gas supply route via the Baltic Sea," Miller said in a statement. "It is important that those are mostly the new gas volumes, which will be sought for in Europe due to the continuous decline in its domestic production."

Under the proposed expansion, two more lines would be added to the existing network running to the German coast, bringing the net aggregate annual capacity to 1.9 trillion cubic feet of natural gas.

The project will be developed by a company named New European Pipeline, where Gazprom would hold a 51 percent share, E.ON, Shell, OMV and BASF would each get a 10 percent stake and ENGIE left with the the remaining 9 percent.

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European company leaders said the pipeline expansion will be a crucial link to a more secure energy future. Domestic European natural gas production is waning and conventional Russian gas arteries through Ukraine are at risk from geopolitical and national security factors.

"Nord Stream 2 is a pipeline project directly connecting gas production from Russia with Western European gas markets, thus showing the highest transport security for the customers," Rainer Seele, chief executive officer at OMV, said in a statement. "With this additional import capacity we can further strengthen the gas hub in Central Europe."

The European Union has expressed concern about Russia's control over the regional market as the company typically controls both the transit networks and the reserves they deliver. Earlier this year, the European Commission said that, "ultimately, each member state in the region should have access to at least three different sources of gas."

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