Russ Oil-Gas

08.02.2007 - MosNews - Former German Chancellor Gerhard Schroeder told the European Commission on Wednesday that the joint Russian-German gas pipeline under the Baltic Sea will not be delayed by environmental and political concerns. Schroeder also said that Russia has been and remains a reliable supplier of gas to Europe. Schroeder, who now serves as adviser to the pipeline’s owner Nord Stream AG, met with EU officials and politicians to put forward his view that the project was critical for Europe’s energy security. The 1,200-kilometer (750-mile) pipeline will go through Russian, Finnish, Swedish, Danish and German territory near parts of the seabed where chemical weapons and mines were dumped during and after World War II. It will avoid overland routes through Ukraine and Belarus where price disputes have seen Europe’s gas supply shut off briefly on New Year’s Day the past two years, raising worries in Europe about Russia’s reliability as an energy supplier. Construction is due to start in 2010 and the company — controlled by Russia’s state gas monopoly Gazprom — said it will complete an environmental impact assessment this summer. “We plan to complete the pipeline on time and we do not believe this would be impossible,” Schroeder was quoted by the Associated Press as telling reporters after the meeting. “I believe this project is completely essential as far as gas supply security goes, not only for Germany but also Europe,” he said, claiming Europe had few other choices as Norway’s supplies dwindle and Iran, the owner of the world’s second largest natural gas resources, is still a political pariah. “As for stability and safety, it’s difficult to name another supplier that would be more reliable than Russia,” Shroeder said. “Even in the years of Cold War Russia has proved to be a reliable gas supplier to Europe.” He said alternatives were in “certain regions of the world, where you must ask, is that politically a better bet than Russia?’” Nord Stream said the pipeline, when finished, could deliver 55 billion cubic meters of gas a year — or a quarter of the EU’s gas needs in 2015 — directly from Russia to Germany where it could then be transported to Denmark, Britain, the Netherlands, Belgium, France and other countries. Gazprom supplied around 150 billion cubic meters of gas in 2005. But countries bordering the Baltic Sea have expressed worries that the pipeline poses a major risk to the environment and Russian activity in their waters could compromise their military security. In December, Swedish lawmakers raised fears about disturbing the seabed, especially because of the large amount of mustard gas from chemical weapons dumped after World War II. Michael Moore, a Swedish army official, said the Baltic Sea was “one of the most mine-riddled” waters in the world, estimating that some 100,000 mines still rest on the seabed. The company said it will carefully examine the pipeline route to avoid or remove ammunition along a 2-kilometer (1.25-mile) corridor. Dirk von Ameln, Nord Stream’s deputy technical director, dismissed worries of explosions, saying most of the chemical ammunition dumped in the sea is inert mustard gas in liquid form. “This ammunition is not equipped with igniters so we don’t have to fear any explosions,” he said. “Nevertheless, we will do a very sound investigation of every meter (yard) where we put the pipeline to find those chemical warfare but also find any other kind of ammunition.” Poland and the Baltic states — Estonia, Latvia and Lithuania — have also weighed in, fearing that the pipeline would see them lose access to gas. Von Ameln was cool about a suggestion from German Chancellor Angela Merkel that a link to the pipeline could calm them, saying they would need to strike a supply deal with Gazprom first. “As long as there is no sales and purchase agreement, nobody tends to build a very expensive spur line into those countries,” he said. The pipeline itself will cost over 5 billion euros ($6.5 billion), but Schroeder said that, including onshore sites, the total outlay would be around 12 billion euros ($15.6 billion). One-third of the basic pipeline cost will be borne by Nord Stream and it would seek financing from the private sector and the EU’s European Investment Bank for the rest. Gazprom owns 51 percent of Switzerland-based Nord Stream, while German energy companies E.ON Ruhrgas AG and Wintershall AG each hold 24.5 percent in the consortium.