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Monday, September 15, 2008

Germany Backs Gazprom Pipeline After U.S. Diplomat Urges Review

Sept. 12 (Bloomberg) by Lucian Kim -- The German government said it still supports a planned natural-gas pipeline from Russia, shrugging off a U.S. ambassador's call for the OAO Gazprom-led project to be reconsidered. ``We have made it clear that we support this project for political reasons,' Ulrich Wilhelm, German Chancellor Angela Merkel's chief spokesman, told reporters in Berlin today when asked about the diplomat's comments. The so-called Nord Stream pipeline beneath the Baltic Sea, chaired by former Chancellor Gerhard Schroeder, is necessary for the European Union's energy security, Wilhelm said. Michael Wood, the U.S. ambassador to Sweden, wrote a commentary in the Swedish newspaper Svenska Dagbladet Sept. 10 saying that Europe must consider alternative energy routes that reduce its dependence on Gazprom following the Russian invasion of Georgia last month. ``Nord Stream bypasses the Baltic states and Poland, potential consumers, and represents a special arrangement between Germany and Russia,' Wood said. ``The EU should be speaking with a single voice to counteract the power of Russia's energy weapon.' The EU should also ``reexamine' a second Gazprom project, called South Stream, to link southern Europe to Russia via the Black Sea, Wood said. The German Foreign Ministry protested to the U.S. embassy in Berlin that it was ``irritated' by the comments, German newspaper Handelsblatt reported yesterday on its Web site. Project Delayed - Nord Stream, designed to raise Russia's export capacity to Europe by a third, faces environmental and political opposition from countries along its route. As a result, the project has had to push back the start-date to 2011 from 2010 and raise the budget to pay for additional environmental safeguards. ``It looks like the U.S.A. is ignorant of the ancient diplomatic rule not to comment on a third country in the place of residence,' the Russian embassy in Stockholm said on its Web site. ``We have no intention to enter into any tussle with the U.S. on the territory of a third country. Unlike our partners, we do not want to sound diplomatically unethical.' The 1,200-kilometer (750-mile) Nord Stream pipeline needs permits from five countries touching the route -- Russia, Finland, Sweden, Denmark and Germany. Nord Stream plans to fix a final route by the end of this month and submit an environmental impact assessment by the end of the year. Gazprom owns 51 percent of Nord Stream, with Wintershall Holding AG and E.ON Ruhrgas AG each holding 20 percent and Nederlandse Gasunie NV 9 percent.

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