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2019.08.28 17:30

Can Denmark sink Nord Stream 2 traversing the Baltic Sea?

From Brussels
Evaldas Labanauskas, LRT.lt2019.08.28 17:30

After navigating most of the Baltic Sea, Nord Stream 2 hit an obstacle in Denmark. NS2 received permits from four out of five partner nations whose territorial waters it has to cross, but Denmark, which will host up to 175 kilometers of the pipeline, is asking for an additional environmental impact assessment that could delay NS2 construction by months.

The delay can also affect Russia’s negotiations with Ukraine on a gas transit agreement, which is due to be renewed in 2020. The delay could also cost Nord Stream 2 AG 660 million euros, according to a recently issued press release.

Denmark is calling for the additional permit in order to ensure “the safest and most ecologically-optimal route” for the pipeline, Ture Falbe-Hansen, the Danish Energy Agency spokesman, told LRT.lt.

He added that, in June, NS2 builders cancelled an earlier request submitted in 2017 for a route crossing Danish waters south of Bornholm.

Nord Stream 2 representatives have decried Denmark’s decision, quoting UN maritime laws, “which Denmark is party to [...] that allow to lay pipelines in a country’s exclusive economic zone,” Roman Bauman, a senior adviser at Nord Stream 2 AG, told LRT.lt.

“However [...] we have submitted a query, alongside a complaint, to the Danish Energy Agency’s council of appeals,” he said.

According to the agency’s representative Falbe-Hansen, it is currently impossible to say how long the process will take.

Read more: Nord Stream 2 pipeline moves ahead despite opposition and US sanction threats

However, energy expert Diane Pallardy from ICIS, a petrochemical market information provider, said that NS2 construction in Danish waters could be finished in five weeks and the Danish Energy Agency’s decisions are purely routine, “aiming to establish the project’s impact to the environment”.

The Baltic Sea is already the most polluted water body in the world, according to the United Nations Food and Agriculture Organization's report last year.

According to Katya Yafimava from the Oxford Institute for Energy Studies, if NS2 gets the permission by the end of September, at least one branch of the pipeline can start operating in January 2020.

“The government in Denmark has changed and now the social democrats are in power,” said Lithuanian MEP Petras Auštrevičius. According to him, the social democrats in Germany – who strongly support the project – could apply pressure on Denmark.

“I cannot rule out that they will try to look for political agreements, but we should keep in mind that Denmark has its own interests – they understand the importance of the Norwegian gas transit for their economy and, therefore, the less Nord Stream gas there is, the more Danes can gain by exporting Norwegian gas,” he said.

However, according to Katya Yafimava from the Oxford Institute for Energy Studies, Germany could use its leverage with Denmark when negotiating with Russia for a continued gas transit through Ukraine. But the longer it takes to get Denmark to cooperate, "the weaker are the chances" to reach a positive agreement with Russia on Ukraine, she said.

Nord Stream 2 construction began in 2015 and is meant to allow Russia to deliver gas directly to Germany.

Kyiv fears the direct passage will eventually make Russian gas transit through Ukraine obsolete, depriving the country of billions in revenue. Poland and Lithuania have also spoken out against the project, which they see as a political tool to be used by the Kremlin to undermine Europe’s energy independence.

“NS2 is an example of disrespect and inconsistency in our [EU] politics,” Lithuania’s Foreign Minister Linas Linkevičius has told reporters. “Within the EU we agreed [...] to diversify our energy sources, so that we wouldn’t be dependent on a single source.”


CORRECTION: In the earlier version of the article, two quotes by MEP Petras Auštrevičius were misattributed to Katya Yafimava.