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Nord Stream 2 faces 8-month delay on Denmark
Journal Staff Report

COPENHAGEN, Aug. 8 - A Russian-led gas pipeline project across the Baltic Sea to Europe could be delayed by up to eight months and cost an extra 660 million euros ($740 million) due to hurdles in securing the necessary permits from Denmark, Reuters reported citing the pipeline operator.

The 1,230-km Nord Stream 2 pipeline, now under construction, has come under fire from the United States, Ukraine and several eastern European, Nordic and Baltic countries, which say the conduit will increase Europe's reliance on Russian gas.

The timeline of the project, led by state-owned Gazprom, is key for the future of the gas transit contract between Moscow and Kyiv, as Ukraine is Russia's main gas route for exports to Europe.

The transit contract, a large source of budget revenue for Ukraine, expires at the end of this year. Nord Stream 2, according to its initial schedule, should have been ready by then.

Gazprom has completed more than 70% of Nord Stream 2 but since April 2017 has had pending applications with Danish authorities to lay between 147 and 175 km via Danish waters.

Nord Stream 2, aimed at doubling the annual capacity of the existing Nord Stream pipeline by adding 55 billion cubic meters, is to run via the waters of Finland, Sweden, Denmark and Germany. It has approvals from all countries whose waters it crosses apart from Denmark.

The Russian-led company submitted two route applications with the Danish authorities, of which the first was proposed more than two years ago. In March, the Danish Energy Agency requested an environmental assessment of a third route option.

Nord Stream 2 labelled the third route request "a deliberate attempt to delay the project's completion".

Nord Stream 2, in a complaint to the Danish authorities in April, said costs related to the new request for a third route had already totaled more than 100 million euros.

According to the letter, obtained by Reuters, the request for a third route could result in a delay of up to eight months and further costs of 560 million euros. The initial budget was 9.5 billion euros.

"Delaying the project will result in a significant financial loss for Nord Stream 2," the letter said, asking the Danish Energy Board of Appeal to nix the energy agency's request.

Nord Stream 2 said in the letter that it had "repeatedly asked for a status update ... without receiving any response".

Aside from Gazprom, half of the funding for Nord Stream 2 is being provided by Germany's Uniper and BASF's Wintershall unit, Anglo-Dutch company Shell, Austria's OMV and France's Engie.

Reuters obtained the document from the Danish Energy Board of Appeal under laws on freedom of information. The Danish Energy Agency did not immediately reply to a Reuters request for comment.

Nord Stream 2 told Reuters it had informed the Danish Energy Agency about the potential impact of delays on costs and the project schedule, but declined to confirm the figures contained in the letter.

"A delay of several months will lead to additional costs of several hundred million euros but we cannot fully quantify because the final impacts depend on the timing of the permit decision of the responsible authorities," it said. (rt/ez)

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