After Wintershall merger, Russia says Nord Stream ready to go

Russian energy company Gazprom aims to double the capacity of the Nord Stream pipeline running through the Baltic Sea to Germany.
By Daniel J. Graeber  |  Dec. 8, 2017 at 8:32 AM
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Dec. 8 (UPI) -- There are enough contracts in place to start construction on expansions to the twin Nord Stream gas pipeline through the Baltic Sea, Russia's Gazprom said.

Gazprom plans to double the capacity for the Nord Stream pipeline system, which runs through the Baltic Sea, and crosses into European territory before it makes landfall in Germany. A Gazprom statement carried by Russian news agency Tass said there were enough contracts signed to move to the construction phase.

"Preparation for gas pipeline construction start is in full swing," the statement read. "Contracts were executed for the time being for all basic materials, equipment and services needed to implement construction work."

The expansion will largely follow the path of the original pipeline system. It would stretch 745 miles from the Russian coast through the Baltic Sea and then make landfall in Germany. From there, it would link up with other networks to feed the European market.

The European Commission said an integrated and competitive gas market was a foundation of the regional energy policy. In amending a gas directive, the commission said last month it was ensuring all pipelines entering into European territory are operating transparently and efficiently.

The measure was aimed at increasing competition between natural gas suppliers and boosting energy security in the European Union, and could complicate Gazprom's plans for Nord Stream.

European leaders are wary of Russia's dominance in the regional energy sector. Russian energy company Gazprom controls both the supplies and the transit networks and some countries in Europe like Poland rely almost exclusively on Russia for their source of natural gas. Liquefied natural gas, some of which comes from the United States, has been seen as a way to diversify the European market.

German energy company Wintershall is in the Gazprom-led partnership working to expand the twin pipeline system. On Thursday, parent company BASF said it would merge Wintershall with DEA, an entity formed by Russian oil tycoon Mikhail Fridman.

Fridman is the former chief executive officer at Russian energy company TNK-BP and his LetterOne investment vehicle acquired the oil and gas unit of German energy company RWE in 2014. LetterOne said the merger with Wintershall creates the largest company of its kind in Europe.

Earlier this year, an official at Wintershall said the United States should avoid playing "geopolitical football" in the European energy sector.

European natural gas production is on the decline, leaving the broader energy market vulnerable to export markets.

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