Pipe Dreams Dutch Firm Invests in Nord Stream

The Gazprom-led consortium of energy companies determined to build a natural gas pipeline under the Baltic Sea grew this week when the Dutch company Gasunie signed on to the project. But leaders in Poland and Sweden continue to raise concerns about the pipeline.

A Gazprom pipeline in Siberia. The Nord Stream consortium plans to build a pipeline under the Baltic Sea linking Russia to Germany.

A Gazprom pipeline in Siberia. The Nord Stream consortium plans to build a pipeline under the Baltic Sea linking Russia to Germany.

Proponents of a plan to construct a natural gas pipeline from Russia to Germany made progress Tuesday when Gasunie, a Dutch gas transport company, agreed to contribute as much as €750 million ($1.1 billion) to the project. The Dutch investment is some rare good news for Nord Stream, the Russian-led consortium of energy companies backing the pipeline. The project has strong support in Russia and Germany -- former German Chancellor Gerhard Schröder is the project's chief lobbyist -- but has met strong opposition on environmental and political grounds in Scandinavian and Eastern European nations.

Gasunie's investment represents a 9 percent stake in the project, which currently carries a total estimated price tag of €5 billion ($7.4 billion). The remainder of the construction costs will be financed by two German energy companies, BASF and E.ON and Russian gas giant Gazprom, a state-owned monopoly. Nord Stream officials said Tuesday in Moscow that they hope the participation of a Dutch company would dissuade fears that the pipeline's mission is to create an exclusive German-Russian energy partnership. That has been a major concern for government leaders in Poland, as well as in Ukraine and the Baltic nations.

The planned pipeline

The planned pipeline

In recent months, Poland has suggested an alternative route for the pipeline that would transport gas overland through the Baltic States and Poland into Germany. And just last week, newly elected Polish Prime Minister Donald Tusk said he wants the project scrapped completely. He speculated during a news conference Tuesday that Nord Stream's current proposal is in danger of unravelling.

"This initiative, this project, has not been prepared well," Tusk told reporters. "I hope and I hear some signals that in the nearest future the sponsors of the project would be ready to seriously correct it."

In addition to political concerns in East Europe, Scandinavian nations have raised questions about the pipeline's environmental impact. Swedish officials said Tuesday that an alternate route should be found for the pipeline because the proposed route runs through an area of the Baltic used as a munitions dump after Word War II. Construction, it was suggested, might stir up toxic materials on the seafloor.

Another potential stumbling block developed last week when the European Parliament passed a resolution urging EU member governments not to invest in new infrastructure until an environmental study is conducted.

Still, Nord Stream officials say they believe construction on the undersea pipeline could start by their target date in early 2010. To reach that goal, permits for the project would have to be secured by spring 2009.



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