Nord Stream 2 AG has received one of two permits for the Russian section of the Nord Stream 2 project, a pipeline that will transport natural gas from Russia to the European Union across the Baltic Sea.
The permit for the pipeline, which is expected to deliver 55 billion cubic meters annually, was issued by the Russian Ministry of Construction, Housing and Utilities, according to a June 7 news release.
Nord Stream 2, which will run from Russia to Germany, is expected to go into operation before late 2019.
Russian oil giant PJSC Gazprom is the sole shareholder of Nord Stream 2 AG. In April 2017, financing agreements for the pipeline were inked with ENGIE SA, OMV AG, Royal Dutch Shell PLC, Uniper SE and Wintershall Holding GmbH under which they will provide long-term financing for 50% of the project's total cost.
Approvals for the construction and operation of Nord Stream 2 have already been granted by Germany, Finland and Sweden, and the national permitting procedure is underway in Denmark.
However, according to previous reports, Denmark is holding off as long as it can before deciding whether it will allow the construction of the €9.5 billion pipeline amid intense lobbying by EU allies, Russia and the U.S.
Denmark could veto the project, which would force the consortium of partners to find a new route for the pipeline. A delay could weaken Gazprom's negotiations with the Ukraine for a new gas transit deal after 2019.
The U.S. LNG industry and its supporters have repeatedly pointed to Russia's grip on Europe's energy markets as a reason to support growing exports of U.S. natural gas. Nord Stream 2 would compete with LNG shipments to Europe, including those from the U.S.
In addition to the June 7 approval, a Russian permit for the construction of underwater pipelines in the territorial sea of Russia needs to be granted.
