Pipeliners

Gazexport.ru - The so-called Northern Route option, i.e., the North European gas pipeline project, is being reviewed now to deliver natural gas from Russia across Finland and the Baltic Sea to northern Germany and further towards the United Kingdom. Russian gas is expected to be marketed in Great Britain, the Netherlands and in Scandinavian countries. The project also includes offshore pipeline branches to deliver gas to the Kaliningrad Region. The NE system will link Russian gas transportation systems directly with the European gas network.
Gazprom and Neste OY (what is now Fortum) established Nord Transgas OY, a joint Russian-Finnish company, in Finland to carry out a feasibility study for the gas pipeline. Major engineering and consulting companies, such as Geoconsult, Kvaerner, and Ramball, were invited to take part in the effort. An agreement was also reached to draw up a business plan and a fund raising concept.
The preliminary feasibility study reviewed several pipeline options, including those across the Finnish and Swedish territory with possible construction of additional branches to Denmark. It is expected that the line from Vyborg to the German coast will be 1187 km long if the subsea pipeline option is chosen.
An agreement was signed in Moscow in April 2001 with Ruhrgas, Wintershall, and Fortum for a joint study of the NE construction project.During the Russia-EU summit meeting in Brussels on November 11, 2002, the North European pipeline was accepted as priority project within the energy dialog with the EU, which opened an opportunity for European financial institutions to participate in it. The technical and feasibility study confirmed that it is technically possible. The North European gas pipeline could be used in future as the shortest route for natural gas transportation from the Shtokman Field.
This project means for Gazexport, in addition to increased exports, also higher reliability of gas supply and the possibility to deliver Russian gas directly to a greater number of customers in Western and Northern Europe. Gazexport is currently working on the project in the following areas:

• marketing research of natural gas markets with the best outlook for gas sales conducted jointly with prospective partners in the project and with outside consultants (Pace Global and Accenture);
• criteria are being developed for foreign companies to enter the project and relevant talks are being held with potential partners on terms and conditions of their participation;
• commercial terms of the project are being discussed with foreign partners..

In November 2002 at the Gazprom Board meeting a resolution bearing on the North European gas pipeline project implementation measures was passed. The action plan and schedule were approved. Talks are being held with all parties concerned to coordinate joint activities.
At the initial stage, gas for the North European pipeline will be taken from Nadym Pur Taz fields (Yamal Nenets Autonomous Region), and later from the Yamal, the Ob-Taz Bay, and from the Shtokman Field. First natural gas is to be delivered in 2007, and the pipeline will reach its rated capacity in 2009.