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Denmark calls on Nord Stream 2 to consider third route for planned gas link

Highlights

Danish agency requests addition to environmental assessment

Two previous pending permit applications remain valid

'No details' regarding timeline for agency decision

London — The Danish Energy Agency has asked the Gazprom-owned developer of the planned 55 Bcm/year Nord Stream 2 gas pipeline from Russia to Germany to consider a third route option, a spokesman for the agency said Thursday.

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The new request adds to uncertainty about whether the Nord Stream 2 developer will be able to complete the link by the end of 2019, when Gazprom's transit contract with Ukraine's Naftogaz expires.

"The agency has requested that Nord Stream 2 investigate the environmental impacts for a route south of Bornholm in the continental shelf area," the spokesman said.

This would mean a route through the Danish Exclusive Economic Zone south of Bornholm -- an island far to the east of the main Danish territory in the Baltic Sea south of Sweden.

Nord Stream 2 already has permit requests in for its preferred route in Danish territorial waters south of Bornholm, as well as an alternative route in the Danish EEZ northwest of Bornholm.

The agency spokesman said that when Nord Stream 2 provides the Danish authorities with an environmental impact assessment it has to go through the normal procedure with public hearings and other processes.

"A decision from the Danish Energy Agency will depend on this process," he said, adding: "There are no details regarding a timeline."

CAREFUL EVALUATION

A spokesman for Nord Stream 2 confirmed the agency had asked the company to include a route option in the Danish EEZ to the south of Bornholm into the environmental assessment.

"Nord Stream 2 will now carefully evaluate the request from the agency," the spokesman said.

He stressed that the agency had not rejected either of the two pending permit applications by Nord Stream 2. "Both of them remain valid," he said.

More than 800 km of the two-string 2,400 km (1,200 km per string) pipeline have already been laid.

But if the Danish permitting process is delayed, it could mean the timetable slips for completion of the project past the end-2019 schedule.

In that case, Gazprom would likely have to continue using the Ukrainian route to meet its contractual supply obligations to European customers until Nord Stream 2 was available.

That would require Russia to agree new transit terms with Ukraine for 2020, with Ukraine insisting these should be in line with EU market rules.

--Stuart Elliott, stuart.elliott@spglobal.com

--Edited by Alisdair Bowles, newsdesk@spglobal.com