Nord Stream and Nord Stream 2

The Nord Stream and Nord Stream 2 are a brand new pipeline routes to transport Russian gas to Europe

Germany, the UK, the Netherlands, France, Denmark and other European states are the target markets for these new pipelines.

Nord Stream and Nord Stream 2 pipeline map scheme
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Nord Stream pipeline directly links Russia and Germany, it plays an important role in ensuring reliable supplies of Russian natural gas and serves to meet additional demand in Europe. This route makes it possible to bypass the not always predictable transit countries.

This pipeline consists of two lines with a throughput capacity of 27.5 billion cubic meters/year each. Its route lies under the Baltic Sea from Portovaya Bay near the city of Vyborg to the German coast near Greifswald, stretching 1224 km.

Nord Stream AG (Switzerland) gas transmission company was established for planning, construction, ownership, financing, and the operation of the gas pipeline.

Equity shares’ breakdown of the Nord Stream AG company is as follows: Gazprom (51%), E.ON (15.5%), Wintershall (15.5%), Gasunie (9%) and ENGIE (9%).

Upon commissioning of the Nord Stream gas pipeline, Gazprom has been looking into the possibility of boosting the capacity of this facility. As a result, on the sidelines of the St. Petersburg International Economic Forum in June 2015 the heads of Gazprom, E.ON, Royal Dutch Shell and OMV signed Memorandums of Intent stipulating the cooperation among the companies for constructing of two additional strings of the Nord Stream pipeline.

Similar to the first two strings, the new ones will be laid from the Russian coast via the Baltic Sea to Greifswald. The capacity of the new gas pipeline will reach 55 billion cubic meters a year. In September 2015, the Shareholders Agreement was signed and the new project was named Nord Stream 2. Its strings are expected to enter service in the fourth quarter of 2019.

Chronology:

In September 2006, the final Shareholder’s Agreement was signed, as well as the Agreement on the basic conditions of gas transportation.

In spring 2010, the Nord Stream consortium attracted external funding from a syndicate of 26 banks amounting to 3.9 billion euros for the first phase of the project. Of this amount, guarantees of export credit agencies SACE and Hermes were received for the sum of 3.1 billion euros.

In April 2010, construction of the first line of the Nord Stream project in the Baltic Sea was launched.

The first line of the Nord Stream gas pipeline became operational on November 8, 2011. On October 8, 2012, the second line of the Nord Stream gas pipeline was put into operation, which increased the capacity to 55 billion cubic meters of gas. The project’s shareholders also examined the preliminary results of the feasibility studies for the construction of the third and fourth strings and came to the conclusion that it was economically expedient and technically feasible.

On June 18, 2015, Alexey Miller, Chairman of the Gazprom Management Committee, Klaus Schaefer, Member of the Management Board of E.ON, Ben van Beurden, Chief Executive Officer of Royal Dutch Shell and Manfred Leitner, Member of the Executive Board of OMV signed Memorandums, which reflect the parties’ intent to implement a project for the construction of two additional gas pipeline strings from the Russian coast to the German coast via the Baltic Sea.

On September 4, 2015, the Shareholders Agreement was signed among Gazprom, BASF, E.ON, ENGIE, OMV and Shell within the Nord Stream 2 project.

On July 8, 2016, Nord Stream 2 AG has finalised its international tender process for the concrete weight coating and storing of  pipes for the construction of the Nord Stream 2. First pipes for the pipeline were delivered to concrete weight coating facilities on October 27, 2016, with the concrete weight coating process planned to commence at the beginning of 2017.

On December 9, 2016, Nord Stream 2 AG and Allseas inked the Letter of Intent for laying the first string’s offshore section for the Nord Stream 2 Pipeline through the Baltic Sea, with the option to collaborate on the second string.

On April 24, 2017, Nord Stream 2 AG signed the financing agreements for the Nord Stream 2 gas pipeline project with ENGIE, OMV, Royal Dutch Shell, Uniper, and Wintershall. These five European energy companies will provide long-term financing for 50 per cent of the total cost of the project.

 

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Related news:

Nord Stream 2 AG and European energy companies sign financing agreements – 24.04.2017

Growth in Europe’s demand for Russian gas confirms importance of Nord Stream 2 – 20.04.2017

Gazprom and Uniper reaffirm commitment to deliver Nord Stream 2 on time – 02.03.2017

Nord Stream 2 to play crucial role in EU’s energy security – 20.02.2017

Gazprom’s exports to Germany add 37 per cent between February 1 and 15 – 17.02.2017

Gazprom Management Committee commends progress made on Nord Stream 2 – 28.12.2016

Gazprom, BASF, E.ON, ENGIE, OMV and Shell sign Shareholders Agreement on Nord Stream 2 project – 04.09.2015

Gazprom, E.ON, Shell and OMV agree upon developing gas transmission capacities to deliver Russian gas to Europe – 18.06.2015