Nord Stream natural gas pipeline in the Baltic Sea begins construction

Source: Nord Stream

Today in a symbolic welding of two pipeline segments, the construction phase of the Nord Stream pipeline project that will directly link Europe’s energy grid to the world’s largest natural gas reserves in Russia was officially launched. 

The first of Nord Stream’s twin pipelines will start transporting gas in 2011. The consortium of Gazprom, BASF Wintershall, E.ON Ruhrgas and Gasunie is investing 7.4 billion euros to create the 1,224 kilometre pipeline. 

The official launch of construction was marked by a ceremony at Portovaya Bay where the gas will start its long journey under the Baltic Sea through the waters of five countries: Russia, Finland, Sweden, Denmark and Germany.

Construction of the 1,224 kilometre Nord Stream Pipeline through the Baltic Sea started on schedule following years of technical and environmental planning, the securing of permits from the five countries through whose waters the pipeline will pass and the signing last month of agreements with 26 international banks for 3.9 billion euros of commercial loans for Phase One of the project. 

The first of the pipeline’s 100,000 25-tonne 12 metre pipe sections were welded together and laid on the bed of the Baltic Sea some 30 kilometres off the Swedish island of Gotland and the pipe-lay vessel Castoro Sei is currently laying the pipeline at the rate of 2.5 kilometres a day moving towards Finnish waters. However the formal celebrations to launch the construction phase are taking place on land at Portovaya Bay near Vyborg, Russia, which will be the start of the pipeline. 

When completed in 2012, Nord Stream’s twin pipelines will be able to transport 55 bcm of gas a year from Russia to Germany, where it will link up with the energy grids of European countries, including Germany, Denmark, the Netherlands, Belgium, France and the United Kingdom. 

The construction of the pipeline and the international spread of material suppliers and service providers – project costs will be 7.4 billion euros – continue to be a major boost for Europe’s economy. It has brought long-lasting infrastructure benefits in several countries bordering the Baltic Sea, which should act as a basis for future economic growth. 

Nord Stream has awarded contracts covering the engineering, construction and pipe laying to firms in Germany, Russia, France, Italy and other European countries. EUROPIPE of Mülheim, Germany, will manufacture, coat and deliver 75 percent of the 12 metre steel pipes that will make up the first Nord Stream pipeline under a contract worth 1.2 billion euros, the largest in the firm’s history. The remaining 25 percent will be supplied by OMK, a Russian steel maker. Italy’s Saipem is undertaking the pipe laying. EUPEC, based in Dunkirk in France is responsible for major logistics operations, constructing and operating the specialised concrete coating plants and organising the complex logistics to transport the ready-coated pipes to the pipe-laying vessels. 

Some 30 percent of the investment funds needed for the project is being provided by Nord Stream shareholders Russia’s Gazprom, Germany’s E.ON Ruhrgas AG and BASF SE/Wintershall Holding GmbH and the Netherlands’ N.V. Nederlandse Gasunie, and the balance of some 70 percent is due to be financed through commercial loans. In March Nord Stream confirmed the successful completion of Phase One financing, which raised funds totalling 3.9 billion euros from 26 banks.

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