Demand haunts Nord Stream advances

BRUSSELS, Nov. 6 (UPI) -- Political advances for the Nord Stream natural gas pipeline could be overshadowed by declining gas demand in response to climate-change policy, analysts say.

The governments of Sweden and Finland gave their consent for the $11 billion Nord Stream gas pipeline through the Gulf of Finland and Baltic Sea to bring Russian gas to Europe.

Energy analysts, however, worry various policies being considered for greenhouse gas emissions and other environmental measures could drive the demand for natural gas downward, The Wall Street Journal reports.

"Nord Stream will be completed by 2012, a time when Europe won't need the additional gas because of the supply glut," said Mikhail Korchemkin, head of the U.S.-based East European Gas Analysis and opponent of the project.

Nord Stream AG, the Swiss-based project consortium, argues that Europe might require an additional 7 trillion cubic feet of natural gas per year by 2025, creating an urgent need for gas imports.

"Even if the demand for additional imports doesn't grow as quickly as predicted, the import gap will still be significant and much bigger than Nord Stream's capacity," said Sebastian Sass, the head of the European Union's interest in Nord Stream.

Apart from supply concerns, several littoral states in the region expressed concern over the environmental impact of pipeline construction, which is complicated by munitions strewn along the Baltic Sea floor.