Nord Stream 2

Nord Stream 2 is a twin pipeline laid over a distance of 1,200 kilometres underneath the Baltic Sea due for launch in 2019. The gas pipeline is set to begin supplying gas from the Russian Federation to Germany. This project has been conceived to advance and promote the reliability and security of gas supply to the European transmission network. Nord Stream 2 builds upon the technical excellence and environmental safety standards achieved with the Nord stream pipeline, which began transporting natural gas through the Baltic Sea in 2011. The successful construction of the first Nord Stream pipeline has shown that this project is a sustainable solution to meet the demand for natural gas in the EU, as it did not cause any significant environmental impacts.

Shareholders and financial investors

Nord Stream 2 AG, the project company established for planning, construction and subsequent operation of the Nord Stream 2 Pipeline is owned for 50% by Gazprom. Nord Stream 2 AG signed financing agreements for the Nord Stream 2 pipeline project with ENGIE, OMV, Shell, Uniper and Wintershall. The combined experience of these energy companies is thought to ensure the best corporate governance for this project. Both Gazprom and Germany stated that Nord Stream 2 would improve the reliability of gas delivery while facilitating the development of the European gas market.

Criticism

The construction of the new gas transmission pipeline has attracted controversy. The main element of the disagreement lies in the fact that Nord Stream 2 will bypass Poland, the Baltic countries, Belarus and Ukraine, key routes for gas flows towards Europe. These countries would further lose their transit rights and have no way of influencing negotiations with Russia. Nord Stream 2 has faced opposition from some European politicians because of the deadlock over Ukraine. Already in June 2014 Russia had decided to stop supplying Ukraine with gas, risking to cut off supplies for European customers as well. However, Germany said it would only agree to the deal if Russia does not stop gas flows to Ukraine and eastern Europe when the transit contract comes to an end in 2019. Yet, despite its oppositions, the project will be decided on not by the EU as a whole, but by the permitting authorities of the five countries whose waters would be crossed by the pipeline: Russia, Finland, Sweden, Denmark and Germany. For the time being, Finland, Sweden and Denmark do not want to block the realisation of the project. Furthermore, according to several environmental experts, the construction of Nord Stream 2 will have a severe environmental impact. In April 2017 the Baltic Marine Environment Protection Commission claimed that the Nord Stream 2 pipeline violates the Helsinki Convention of 1991 and the Ramsar Convention of 1971, as it crosses nature reserves in the Baltic Sea.