Tuesday

22nd Oct 2019

Russia warns Denmark on gas pipeline

  • Nord Stream 2 pipes on train in Germany in May (Photo: nord-stream2.com)

Russia has warned Denmark that its Nord Stream 2 gas pipeline might bypass Danish waters, after a new law that increased uncertainty on permits.

A spokesman for the Russian project told the country's state news agency Tass on Friday (1 December) that "due to the ongoing changes in the legislation and political disputes Nord Stream 2 decided to study alternative routes beyond the territorial waters of Denmark to reduce potential risks".

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The spokesman added that, for now, "we continue working according to our [original] plan and the request we filed and we are watching how the situation is developing".

The spokesman also said that the project's backers - Russian gas company Gazprom and five energy firms from EU states - "required rule of law" to be upheld in Denmark in order to invest there.

The warning came after Danish MPs passed a law on Thursday that allowed the foreign ministry to forbid construction if the pipeline harmed Danish strategic or security interests.

Previous rules said the Danish energy and climate ministry could only block it on environmental grounds.

"Denmark is completely right to have concerns about Nord Stream 2, a Russian political project, a danger to European security, and a reversal of all the EU's good work on energy security," Anders Fogh Rasmussen, a former Danish PM and ex-Nato head who now works as a consultant for Ukraine, said.

The new law enters into force on 1 January, but is to cover Nord Stream 2's application because the environment ministry has not yet issued its decision.

The pipeline is to run through Finnish and Swedish economic zones and through Danish territorial waters south of the island of Bornholm in the Baltic Sea to Germany.

If Russia moved the route north of the island into international waters it would see Danish port firms on Bornholm lose hundreds of millions of euros in potential income.

Denmark was one of several EU states which asked the European Commission, earlier this year, to negotiate details of the project with Russia.

It said at the time that it would be hard for individual member states to stand in its way if the EU did not get involved.

The Finnish economic affairs ministry and the Swedish enterprise and innovation ministry are to issue their permit decisions later this year or in early 2018.

The European Commission is concerned that Nord Stream 2 would harm EU energy security by concentrating 80 percent of Russian gas exports in a single route.

It has also proposed a new law designed to stop Gazprom from using its monopoly on the pipeline to bully EU clients.

Germany has a veto on letting the commission negotiate with Russia, however.

Germany and other EU friends of Nord Stream 2 - Austria, France, the Netherlands, and the UK - could also derail the proposed law.

US sanctions

The Russian project faces opposition further afield.

Heather Nauert, a US State Department spokeswoman, said on Thursday: "It would pose security risks in an already tense Baltic Sea region".

She as said it would "significantly increase Europe's vulnerability to a supply disruption" in EU states such as Poland.

The US earlier this year threatened to impose fines on EU firms that invested in the pipeline.

Speaking to press on Wednesday, John McCarrick, a senior US diplomat, said Nord Stream 2 construction "is not something we are going to assume is going to happen."

Meanwhile, Russia is ploughing ahead with the project, which is to be completed by 2019.

The spokesman for the Nord Stream 2 consortium told Tass on Friday it had already signed €4.5 billion of contracts with 600 construction companies from 23 countries.

New EU law takes aim at Russia pipeline

Proposed law could complicate Russia's plan to build new gas pipeline to Germany, but jurisdictional issues mean project will be decided by Moscow and Berlin.

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The EU also agreed on financing a study into the Southern Gas Corridor, to send a signal that the EU is still invested in the project - but leaves questions over renewable energy sources.

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