New routes for gas

New routes for gas

Elisa Maria Giannetto
Share
Gazprom and five European companies have signed an agreement to finance a project to expand the Nord Stream gas pipeline. Bypassing Ukraine, the new pipeline will double the amount of Russian LNG shipped to Germany by 2019

New gas pipelines to double LNG supplies, bypassing traditional routes and redrawing the map of international energy relations. Nord Stream 2 will further enrich this map starting in 2019. A partnership to fund the project has just been hammered out, allowing construction to begin on a pipeline that will bring LNG from Russia to Germany, crossing the Baltic Sea rather than Ukraine.
The company Nord Stream AG 2, in which Russia’s Gazprom holds a 100% stake, has signed contracts with Engie, OMV, Royal Dutch Shell, Uniper and Wintershall. The five European energy firms will each pay €950 million, collectively covering half of the €9.5 billion project’s total cost, while the rest will be paid by the Russian giant, which will remain Nord Stream 2’s sole shareholder. Construction will begin in 2018 and be completed following year. The 1,220 km long gas pipeline will have a capacity of 55 bcm, doubling the amount of gas that can be transported.
Natural gas is also key to the Cypriot government’s decision to once again attempt to a tender for LNG supply projects for electricity production. According to the newspaper Politis, the terms of the new tender will differ from previous ones. For one thing, it is split up into two contracts: one for the supply of LNG, and another for processing the fuel. The winning bidder for the first contract will be responsible solely for bringing the LNG to Cyprus. The firm awarded the processing contract will then see to regasification so that the fuel can be burned in order to produce electricity.