Gas Processing & LNG is Produced by Gulf Publishing Holdings LLC



Russia completes Nord Stream 2 construction, gas flows yet to start

Gazprom finished construction of the Nord Stream 2 subsea pipeline to Germany, allowing Russia to potentially double lucrative gas exports to Europe via the Baltic Sea while bypassing and cutting off a source of income for political foe Ukraine.

Although gas flows have yet to be cleared by German regulators, the completion of the construction stage means Russia has successfully boosted its energy exporting capabilities towards Europe both from the north in the Baltic Sea and from the south in the Black Sea, where it operates the TurkStream pipeline.

"The head of the management board, Alexei Miller, told the morning meeting at Gazprom that the construction of Nord Stream 2 was fully completed today in the morning at 0845 Moscow time," Gazprom said.

Gazprom started construction of the 1,200-km long Nord Stream 2 pipeline from Russia to Germany five years ago. Progress of the $11 billion project stalled at the end of 2019 when then U.S. president Donald Trump imposed sanctions on it.

The construction restarted around a year later with the engagement of Russia's own vessels.

The route, jointly with the existing Nord Stream pipeline, will double the annual export capacity to 110 billion cubic metres, around half of Russia's total gas exports to Europe a year.

The project has drawn criticism from the United States and Ukraine among others. Washington says it will increase Europe's reliance on Russian energy supplies, while it is seeking to boost its own sales of sea-borne liquefied natural gas to Europe.

The United States has called its super-chilled gas exports to Europe a way to spread "molecules of freedom" across the Atlantic.

Gazprom is Europe's largest supplier of natural gas, accounting for more than a third of the region's gas market.

Russia said on Thursday pumping commercial gas supplies via Nord Stream 2 would not start until a German regulator gives the green light.

The Swiss-based Nord Stream 2 AG consortium said in a statement that it has completed welding of the pipeline with the help of Russian vessel Fortuna.

"The required pre-commissioning activities will be carried out with the goal to put the pipeline into operation before the end of this year," it said.

NO CLEARANCE YET

Gazprom's announcement on the construction completion was met with scepticism in Kyiv, which risks losing billions of dollars in gas transit fees if Moscow halts gas supplies via Ukraine.

Russia's current five-year gas transit deal with Ukraine expires after 2024. Russian President Vladimir Putin has said Ukraine must show good will if it wants Russian gas transit to Europe to continue.

"Constructed doesn't mean to put it on stream. And this won't happen until the pipeline is certified," Olha Belkova, a manager at Ukraine's gas pipelines operator, said in emailed comments to Reuters.

Carlos Torres Diaz, head of Power and Gas Markets at analysis firm Rystad Energy, also said it takes time for gas to flow via the pipes of Nord Stream 2. "There hasn't really been a reaction from the market so far so I guess this just also confirms expectations that no commercial deliveries are expected in the short term," he said.

The Kremlin said "everyone" was interested in Nord Stream 2 obtaining the necessary clearance for gas supplies.

Germany's energy regulator has to award an operating licence to Nord Stream 2, which must comply with European unbundling rules that require the owners of pipelines to be different from the suppliers of the gas that flows in them to ensure fair competition.

Gazprom's Western partners in the project are Germany's Uniper, BASF's Wintershall Dea, Anglo-Dutch oil major Shell, Austria's OMV and French energy company Engie. (Reporting by Vladimir Soldatkin, Oksana Kobzeva in Moscow, Pavel Polityuk in Kyiv, Vera Eckert in Frankfurt and Nora Buli in Oslo; editing by Jason Neely, David Evans, Elaine Hardcastle)


Copyright © 2019. All market data is provided by Barchart Solutions. Futures: at least a 10 minute delay. Information is provided 'as is' and solely for informational purposes, not for trading purposes or advice. To see all exchange delays and terms of use, please see disclaimer.

                                  CMEGroup                                     Icelogo

FEATURED COLUMNS

Editorial Comment
-Adrienne Blume
Worldwide, small-scale LNG liquefaction capacity is expected to expand by 30% over the next 4 yr, increasing from 33.9 MMtpy in 2021 to 43.92 MMtpy in 2025.
Industry Focus: LPG sector poised for sustainable fuel transformation
-Gordon Feller
Like virtually all industries, the liquified petroleum gas (LPG) sector was challenged by the COVID-19 pandemic throughout 2020.


Throughput optimization for pipelines and gas plants

Register Now

Many processes within oil and gas pipelines and processing plants depend on maintaining specific temperatures and pressures at which the process fluids are liquids or gases. In addition, anytime water is a component in the process fluid hydrates can form and plug piping and vessels. Learn how Sensia’s Throughput optimization solution allows operators, and control systems to “see inside” the process in real time to understand where the facility is operating with respect to critical physical constants, including the phase envelope and hydrate temperature. This insight allows for more stable operation, reduced energy expenditure and associated emissions, and greater facility throughput. Case studies will include controlling methanol injection, managing heaters, virtual sensors for sulfur recovery units and more.

April 1, 2021 10:00 AM CDT

Register Now

 

Please read our Term and Conditions, Cookies Policy, and Privacy Policy before using the site. All material subject to strictly enforced copyright laws.
© 2021 Gulf Publishing Holdings LLC.