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The Danish Energy Agency (DEA) has granted a permit to the Nord Stream 2 consortium to construct the pipeline through Denmark's exclusive economic zone, but the project is unlikely to be completed this year.
The regulatory body granted the permit to the application involving the shortest route, through a 147km section of water offshore Denmark, southeast of the island of Bornholm. The project developer — a subsidiary of Russian state-controlled Gazprom — said it was "pleased" with the decision. But timelines specified by the developer today suggest that the project would be completed in January or February at the earliest, while start-up had been targeted for the start of next year.
The developer also needs to test the pipeline and fill it with gas. The project would have to meet EU legal requirements on the pipeline's ownership structure, and on third-party access to it if it is to be commissioned in the first quarter, unless alternative arrangements are agreed.
And several conditions attached to the DEA's permit could affect the timeline for completing the pipeline.
The permit's conditions state that it cannot be utilised until the appeal deadline of four weeks after the announcement of the permit — 27 November — has expired. And the consortium is obligated to prepare several documents for the approval of DEA and other bodies linked to project works.
A Nord Stream 2 spokesperson today said this process will take "a few weeks". But it is unclear how many of the necessary agreements the consortium has been able to prepare before approval of the construction route, and Nord Stream 2 was not available to provide details on assessment of the timeline for this process.
The consortium must reach agreements with DEA, including on crossing existing infrastructure on the seabed and the monitoring of environmental conditions. And the consortium must reach agreement with Denmark's national fishermen's association before any pipes can be laid.
DEA said the approved route was likely to have little effect on environmental monitoring stations near Bornholm. But Poland said in a submission to DEA that there is "considerable risk" of damage to one environmental station located 100m from the route. The consortium agreed to consult with relevant authorities that operate stations close to the pipeline route to address these concerns.
The Nord Stream 2 consortium earlier today said preparatory works, such as the installation of concrete mattresses and rock placement for the crossing of existing infrastructure, and the subsequent laying of the pipelines, will start "in coming weeks". The Danish section of the route will be built with pipes stored on the German island of Rugen, it said, about 60km from the route's proposed landfall at Greifswald in Germany.
The Nord Stream 2 spokesperson said laying the pipes will take "approximately six to eight weeks, depending on the weather conditions and the permit conditions, which are … being examined". This was based on a daily construction rate of 3-4km on each of the two strings of the pipeline, he said. Gazprom previously said laying pipes through Danish waters should take a maximum of five weeks.
Construction of the other outstanding section of the project, through German waters, is "for the most part" complete, the firm said.
Commissioning of the pipeline was envisaged for the start of next year, but Nord Stream 2 repeatedly said a Danish permit delay could push back the line's completion date.
The project also needs to overcome legal hurdles associated with compliance with EU's amended gas directive. This expands the ownership unbundling and third-party access regime to cover pipelines such as Nord Stream 2. The EU amended its gas directive on 23 May, and member states are obligated to transpose this into national law within nine months — by 23 February.
Germany has yet to complete this process. A Nord Stream 2 spokesman said the consortium will review the applicable legislation "once it has become available". He said it is "premature to speculate about any impacts" in relation to how this could affect the timeline for commissioning the project.
The consortium has initiated two separate legal actions contesting the directive's applicability to the project, which remain outstanding.
Ukraine's state-controlled Naftogaz criticised the DEA's decision to grant the Nord Stream 2 a construction permit. "Denmark … delayed the project for some time, but geopolitical weapons cannot be stopped by instruments that regulate exclusively trade relations," chief executive Andriy Kobolyev said.
