Russ Oil-Gas

// Finland’s former Prime Minister to help construct the Nord Stream across the Baltic Sea
He’ll become advisor to the Nord Stream head
Aug. 18, 2008 - Kommersant - Finland’s former Prime Minister Paavo Lipponen will become advisor to the Nord Stream AG head. To Gazprom, which is in control of the company, such consultants is the only opportunity to quickly get all permits to construct the pipeline from Russia to Germany across the Baltic Sea by 2011. Friday, the operator of the Nord Stream AG pipeline construction reported that an agreement with Finland’s former Prime Minister Paavo Lipponen was reached. “Mr Paavo Lipponen will become advisor for addressing environmental issues and receiving permits to build the pipeline in Finland. With his help, we’ll try to clear up legal matters concerning the peculiarities of the Finnish law,” the company’s spokesperson explained to Kommersant. The shareholders of the Nord Stream AG include Gazprom (51%), Germany’s BASF (20%) and EON (20%), as well as Holland’s Gasunie (9%). With its capacity of 55 billion cubic meters annually, the Nord Stream pipeline is to connect Russia and Germany. The first branch of the pipeline is to be launched in 2011, the second one – in 2013. The company’s press-release was issued after the former Prime Minister said in his interview with Finland’s Helsingin Sanomat that he agreed to work as Nord Stream advisor for a year, and that he had been invited by the company’s CEO Mattias Varing and Chair of the Shareholders Committee, Germany’s former Chancellor Gerhard Schröder. Mr Lipponen emphasized that he’ll be an independent consultant. “I’ll work with two parties – I can point to the opinion of the Finnish government regarding the Nord Stream management and convey information from corresponding Finnish bodies,” Mr Lipponen stated. Now he works as advisor to Finland’s energy company Pohjolan Voima. As to the profit he can get from the project, Mr Lipponen said that it’s “moderate” and complies with the volume of payments international consultants get. The necessity to invite the Finnish former Prime Minister is caused by the fact that so far no pipelines have been constructed in Finland’s exclusive economic zone, and there’s no tested mechanism of settling relevant issues with the government of Finland. The Nord Stream AG is planning to accomplish extra environmental research taking account of the recent applications of the ministries of Sweden, Denmark and Finland. The outcome of the research will be included in the final draft of the company's report on meeting the standards of environmental impact assessment (EIA) in the transborder context. The report is to be issued in October. It’s the third time Gazprom invites Europe’s former top politicians. Gerhard Schröder was the first one – he was invited by Vladimir Putin personally. This summer Gazprom CEO Alexey Miller invited Italy’s former Prime Minister Romano Prodi. It need be said, however, that Mr Prodi could not agree at that moment since he was incumbent Prime Minister. And Mr Lipponen retired five years ago. According to Valery Nesterov from Troika Dialog, the invitation of the political heavyweight is aimed to foster the realization of the project. The Nord Stream first claimed to launch the first branch of 27.5 billion cubic meters of gas annually in the third quarter of 2010, then the date was changed twice: to 2011 and 2012. Nevertheless, in June the company reported ready to launch it in 2011 again. So, there’s only two years left to receive all necessary permits. “The company has issued a white book (of environmental norms – Kommersant), it’s working its way through the legal labyrinth. All it has to do now is comply with the planned deadline of launching the pipeline,” Mr Nesterov opines. According to East European Gas Analysis director Mikhail Korchemkin, Gazprom shouldn’t have announced the time frames of the start of supplies before getting the permits with the Baltic states trying to show the officials that “nothing depends on them”. In the view of the expert, the company may get “bogged down” in the governmental studies of Sweden and Denmark, and he doesn’t believe that Mr Lipponen’s personal contacts can truly eliminate the difficulty. However, Mr Korchemkin doesn’t rule out that Gazprom may continue inviting former European officials to its projects.