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Nord Stream 2 seeks permit for third Danish pipeline route, slams delays

London β€” The project company building Russia's 55 Bcm/year Nord Stream 2 gas link to Germany has applied for a permit for a third route for the Danish section, while slamming the delays in approving two existing requests.

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The Danish Energy Agency asked Nord Stream 2 last month to consider a third route through a previously off-limits disputed exclusive economic zone south of the island of Bornholm.

The move adds to uncertainty about whether the link will be online by end-2019 as planned, before Russia's transit contract with Ukraine expires.

"Asking for a third route option to be developed, despite two fully processed, ready-to-be-permitted applications on the table, can only be seen as a deliberate attempt to delay the project?s completion," Nord Stream 2 said Monday.

More than 40% of Russia's 55 Bcm/year Nord Stream 2 gas link to Germany has been laid, and building work is on schedule in Finland, Germany, Russia and Sweden where it has permits.

The onshore onward capacity expansions needed in Germany and the Czech Republic to carry Nord Stream 2 gas to final customers are also on schedule, the grid operators involved told S&P Global Platts Friday.

Russia's Gazprom, the sole owner of Nord Stream 2, has said flows via Ukraine would likely drop to below 20 Bcm/year once both it and the 31.5 Bcm/year Turk Stream link to Turkey come online.

The European Commission, however, wants Russia to sign a new 10-year transit contract with Ukraine for 60 Bcm/year to keep the Ukrainian route open and viable.

Any delay to Nord Stream 2's start could put pressure on Russia to commit to sending more gas via Ukraine.

NS2 SLAMS DELAYS

Nord Stream 2 is still waiting for decisions on a permit request from April 2017 for a route through Danish territorial waters south of Bornholm, and one from August for a route through Denmark's exclusive economic zone northwest of Bornholm.

"It is incomprehensible why there has still been no decision" on either route, Nord Stream 2 said, adding that it was "now forced to submit this third application as a mitigation measure."

The permit delays undermined "fundamental Danish constitutional and European law principles of legitimate expectations and legal certainty," it said.

They also breach the good faith principle required by the 1982 UN Convention on the Law of the Sea, which sets the rules for laying pipelines in exclusive economic zones, it said.

NO DEADLINES FOR DANES

The DEA plans to start the required public consultation on the new route request shortly, and consult with relevant neighboring countries, such as Poland, as required under the Espoo convention, it said Monday.

"The length of this part of the case processing will depend on the number, content and complexity of the consultation responses. This means that the agency currently cannot say when a permit can be granted," it said.

It will only issue one permit for the project.

The route through Danish territorial waters requires a positive recommendation from Denmark's foreign ministry that the project is compatible with Denmark's foreign, security and defense policy. If the ministry says it is not compatible, the DEA will refuse the permit. If it is compatible, the DEA will then assess the route in comparison with the other two routes.

"A permit can only be issued when it has been clarified which of the routes is the most optimal from an environmental and safety perspective," it said.

It requested the third route option as "the immediate assessment" is that a southeastern route "is more appropriate" based on environmental and safety criteria, it said.

The southeastern route only became an option after a recent agreement between Denmark and Poland on their economic exclusive zone borders, the DEA said.