Nord Stream: The next steps

With Nord Stream coming closer to fruition with the completion of pipe laying under the Baltic, Business RT spoke with Nord Stream head Matthias Warnig about the road ahead.

MW:  “It’s really a good day for Nord Stream, and for the milestone and the programme of realization of our project.It is really a special moment seeing the mechanical completion.It’s done, the last pipe, it’s on the bottom of the sea.So we can go now on the next phase, testing and preparing and commencing the gas delivery to Europe, which becomes now visible. RT:  What activities are ahead in order to meet the deadline of October or November ?MW:  “First of all, if you know, we have laid down the pipeline in sections.This means the sections have to be connected in Grunewald.Then we have to test the pipeline, with the pressure test.And after this to clean to dry and start to fill the pipeline slowly, softly, with gas.That is the next steps.”RT:  Could you give us the outlook on the gas market in Europe? MW:  “Fukushima and all of the events in North Africa have an influence on the energy debate in Europe.You can see this, you can feel this, especially in Germany.Everybody is under the impression how national catastrophes and political instability can change the sustainability of energy and energy supply for Europe and I think under these aspects, the event of bringing first gas in directly through the Baltic Sea to Europe will be important and further energy solidarity and safety of Europe. “ RT:  Could you give us a quick understanding of what Nord Stream’s market position is, for example in comparison to LNG?MW:  “It will not seem as pipe transportation, and for pipe transportation it has always an advantage for the customer, for the buyer, that the supplier can only sell the gas at the end of the pipe.So an LNG shipment is flexible.It can go to Asia, it can go to all the places of the world.So, here, one the one hand we are in competition but in the long run pipe gas has, for customers an especially long term clear advantages.” RT:  The Nord Stream pipeline is a sizeable investment – somewhere around 11 billion Euros.MW  :“Nord Stream offshore is a direct investment of 7.4 billion Euros.”RT:  Could you tell us then when it will become profitable?MW:  “We have a long term financing with up to 14-15 years, and after the financing, of course, we have the golden end of the lifetime and we are in the profitable sphere.”RT:  Are there any plans to expand Nord Stream ? MW:  “Such a decision or such a planning doesn’t exist today.”RT:  What further gas infrastructure does Europe need?MW:  “It is a simple calculation – Studies from different institutions, for example CERA, showing that he gap in the consumption, supply and consumption in Europe, could be, in the next years, around 200 billion cubic metres.Nord Stream can cover 55, so this is a quarter of the gap.This means, automatically, there has to be other supply routes to cover the needs and consumptions in Europe.”RT:  Would the Nord Stream project have seen the light of day of the EU’s third energy package had been put into effect earlier?MW:  “I don’t see any effect.”RT:  There have been recent suggestions that the capacity of Nord Stream could be increase, how could this be implemented?MW:  “This is first of all a decision of the participating investors or shareholders.”RT:  So you wouldn’t care to comment on how significantly it could be increased or how long?MW:  “This is a question, which has to be first addressed to the shareholders of Nord Stream.”