LNG

Denmark has opened the way for the completion of the Russian-led Nord Stream II pipeline natural gas project for Western Europe to compete with LNG after previous delays caused by threats of US sanctions.

Construction of the 1,230-kilometres pipeline is almost complete, apart for a final stretch of around 120 kilometres in length in Danish waters.

The Danish Energy Agency said it would allow the Gazprom-led project to use pipe-laying vessels with anchors instead of the more advanced ships using self-positioning technology and which are affected by US sanctions imposed in December 2019.

The US considers the Nord Steam II project a security risk to Europe, though both Russia and most European Union members have condemned Washington’s sanctions.

Germany is the main EU supporter of Nord Stream II and has been accused by several EU members, including Poland, of encouraging the EU energy security policy of building LNG import terminals to reduce dependence on Russian pipeline gas while encouraging the new Gazprom pipeline project to supply Western Europe.

Nord Stream II also bypasses EU LNG importers Poland and Lithuania, as well as the traditional pipeline transit nation Ukraine, on its route under the Baltic Sea from the Russian port of Ust-Luga, near St Petersburg, to Greifswald in northeast Germany.

The Swiss-Dutch subsea company Allseas, which was laying the dual pipelines using two vessels, the “Pioneering Spirit” and the “Solitaire”, halted its work to avoid US sanctions.

With Allseas leaving the project, the Russians have taken over and President Vladimir Putin assured the Russian public that the pipeline would be completed without international assistance.

The Nord Steam II project's two parallel pipelines will be able to transport 55 billion cubic metres per annum of natural gas from Russia to Germany.

After starting in Russian waters, the pipelines pass through Finnish, Swedish, Danish and German marine areas before making their landfall on the German coast.

Still, even if Gazprom completes the project, the company will have to face legal obstacles related to its operation within the EU internal market.

The EU extended its internal gas market regulations in 2019 to pipelines to and from non-EU countries.

Under the amended law, Nord Stream II must adhere to third-party access (TPA) and tariff regulations for pipelines entering EU member territory as well as to the principle of unbundling, whereby the transmission and ownership of natural gas need to be separate from each other.

Analysts say this is a problem for Gazprom because of its vertically integrated structure.

The Russian company could, however, avoid the new EU rules if it is awarded an exemption by the national energy market regulator of the EU member state where the pipeline enters the EU - Germany’s Federal Network Agency.

Meanwhile, a Russian vessel, the “ Fortuna”, which is potentially able to complete the Nord Stream II pipeline, was heading for Danish waters, according to shipping data.

The “Fortuna” is a pipe-lay crane vessel that was built in 2010 and is sailing under the Russian flag.

In the decision to let the Russians lay the pipes, the Danish Energy Agency emphasized, among other things, that the remaining part of the pipelines must avoid certain areas of the sea bottom where deep trawling, anchoring and seabed interventions are discouraged due to the risk posed by “dumped chemical warfare agents”.

“The decision is made in accordance with the Continental Shelf Act and on the basis of Denmark's obligations under the UN Convention on the Law of the Sea,” said the Danish statement.

“Here, Denmark is obliged to allow the construction of transit pipelines with respect for safety and resources rules and the environment,” stated the Danes. 

Germany utility and energy company Uniper outlined its strategy of focusing more on pipeline natural gas, LNG and gas-fired power while exiting coal as it swung to an annual profit from a loss the previous year.

Nov 22 (LNGJ) - OMV AG of Austria, the energy and utility company, plans to cooperate on LNG with Gazprom after the Russian natural gas giant increased deliveries of pipeline gas to the Austrians for a fifth straight year. For the period from January 1 to November 21, 2019, Gazprom delivered 12.7 billion cubic metres to Austria, which was 2.8 percent more than in all of 2018 when deliveries came to 12.3Bcm.

OMV is one of the five European corporate investors in the Nord Steam II project, the second Baltic pipeline from Russian to Germany and then onwards to other European Union nations carrying 55 Bcm of pipeline gas per annum. The latest Austrian gas delivery details emerged at a meeting in St Petersburg between Alexey Miller, Chairman of Gazprom, and OMV Chief Executive Rainer Seele.

“Special attention was paid to the implementation of the Nord Stream II project,” said a Gazprom statement on the talks. “Furthermore, potential cooperation in the LNG segment under the Memorandum of Understanding first signed in June 2019, was also discussed at the meeting,” it added. OMV along with France’s Engie, Royal Dutch Shell and Germany’s Uniper and Wintershall signed an agreement with Gazprom to provide financing for 50 percent of the total 9.5 billion euros ($10.5Bln) cost of Nord Steam II.

Polish Oil and Gas Company has signed an agreement with US liquefied natural gas development company Venture Global to buy 1.5 million tonnes per annum of additional supplies as it aims to reduce its dependence on Russian pipeline gas.

German energy companies Wintershall Holding and Deutsche Erdoel AG (DEA) have completed their merger and the newly titled Wintershall Dea is now the leading independent gas and oil company in Europe with an initial public offering (IPO) of shares planned for 2020.

June 1 (LNGJ) - German natural gas imports from Russian company Gazprom have soared by 15.7 percent in the first five months of 2017 compared with last year. Gazprom said it supplied 22.3 billion cubic metres of gas to the German market from January until the end of May, which is 3 Bcm more than in the same period last year. The figures came from a meeting in St Petersburg between Gazprom Chairman Alexey Miller and Klaus Schaefer, Chief Executive of German energy company and unity Uniper. The two discussed the Nord Stream 2 pipeline project to Germany from Russia, noting that the recent signing of the “financing agreements was crucial to the implementation” of the venture to bring even more Russian gas to Germany and Western Europe.

Five European energy companies, including prominent LNG industry participants, have signed an agreement to provide 50 percent of the financing for the Russian-led $10 billion Nord Stream 2 natural gas pipeline project to compete with larger volumes of US LNG scheduled to arrive in the next few years.

Russian natural gas company head Alexei Miller has held talks in St Petersburg with his counterparts from Royal Dutch Shell and German utility and energy company Uniper when issues discussed included LNG and soaring pipeline natural gas exports to Germany, nearing 50 billion cubic metres per annum.