Pipeliners

MOSCOW, October 6 (RIA Novosti) - Russia's natural gas giant, Gazprom, intends to start the construction of the first sections of the North European Gas Pipeline by the end of the year, a senior official said Thursday. Valery Golubev, the head of Gazprom's Investment and Construction Department, said the company wanted to start construction on November 1. He said Gazprom was planning to announce four tenders on pipe supplies for the project and would give Russian companies the opportunities to bid in them. The list of prospective firms will include Severstal's new Izhora pipe plant, which is set to start operation next year, he said. This year Gazprom intends to buy pipes from Vyksunsk Metal Works, the biggest subsidiary of the United Metallurgical Company, but has said foreign companies can bid in the future tenders. Golubev said the company has yet to decide on tenders for the undersea segment of the pipeline. The 1,200km-long pipeline will mean natural gas can be exported from Russia without passing through third countries, thereby reducing transportation costs and making it more reliable for export. The pipeline, which could cost up to $10 billion, will pass through Russia's Vyborg region, go under the Baltic Sea and emerge in Germany. Construction on the pipeline is scheduled to end in 2010, with the first section's annual pumping capacity of 27.5 billion cu m and the second section extending it to the designed capacity of 55 billion cu m per year. The pipeline will help expand natural gas supplies to Scandinavia and provide reliable gas supplies to western Europe, as gas consumption continues to grow there.