Pipeliners

12-09-2005 RBC News - Gazprom, Russia's gas monopoly, has begun the construction of the North European Gas Pipeline. The official ceremony was held on Friday to mark the beginning of the construction. The ceremony was attended by Russian Prime Minister Mikhail Fradkov, Industry and Energy Minister Viktor Khristenko, Gazprom CEO Alexei Miller, German Economy Minister Michael Glos, Wulf Bernotat, chairman of E.ON, and Juergen Hambrecht, chief executive officer of BASF. Fradkov said the North European Gas Pipeline will help guarantee energy safety in Europe and in the world. "We are creating conditions for stable cooperation in the energy sphere, ensuring energy safety in Europe and the whole world," he stressed. The premier called the pipeline project "the largest cooperation project in the gas sphere between Russia and Europe." Fradkov said the implementation of this project would mean new jobs in the region, noting with satisfaction that large-diameter pipes for the North European Gas Pipeline were produced in Russia. He did not rule out that in future, Russian materials would be primarily used for the implementation of the project. He said the new pipeline would significantly simplify the transportation of Russian gas through third countries, creating conditions for more stable supplies to Europe. On the whole, he stressed, this was a very beneficial project for the Russian economy. In September 2005, Russia's gas giant Gazprom, German chemicals manufacturer BASF and E.ON Ruhrgas signed a deal to build a gas pipeline connecting Russia and Germany under the Baltic Sea. In the new venture, called North European Gas Pipeline Company, Gazprom will hold 51 percent and BASF and E.On will have 24.5 percent each. The pipeline will stretch for more than 1,200 kilometers, from the city of Vyborg in the north-west of Russia, to Germany's northeastern city of Greifswald. The new gas pipeline is expected to go on-stream in 2010, with an annual capacity of 27.5 billion cubic meters. A second planned pipeline could double capacity to around 55 billion cubic meters a year. Overall costs for two pipelines would be above EUR 4 billion, the companies said. Construction of the first pipeline will commence this autumn.