Putin touts value of Nord Stream-2 gas pipeline expansion to Germany

By ELENA MAZNEVA and ANDREY BIRYUKOV
Bloomberg

Russia’s plan to expand a natural gas pipeline directly to Germany, bypassing Ukraine, isn’t intended to reduce the importance of existing supply routes, according to President Vladimir Putin.

The new Baltic Sea link, known as Nord Stream-2, “is not designed to strip anybody of transit opportunities” and will help Europe offset declining domestic gas production, Putin said Tuesday at a forum organized by VTB Capital in Moscow.

The Nord Stream-2 project has faced criticism since Gazprom signed in September an agreement on building the link with five European energy companies including Royal Dutch Shell and EON.

The pipeline risks concentrating 80% of the bloc’s Russian gas imports on one route, European Energy Commissioner Miguel Arias Canete said last week, while eastern European leaders warned it could isolate Ukraine, which currently carries about a third of Russia’s gas exports through its pipelines.

Russia, which supplies a third of Europe’s gas, plans at least two new routes to the region, via Turkey in the south and Germany in the north. Russia has said it may cut supplies through Ukraine when the current transit deal expires in 2019, which could cost Ukraine about $2 billion/year in lost fees, according to its prime minister.

All “political speculation” should be set aside, Putin said Tuesday. Nord Stream-2 “doesn’t get in anybody’s way,” he said.

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