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Denmark yet to receive updated Nord Stream 2 work plan on completing gas link

Highlights

Nord Stream 2 says still considering various options

Pipelaying with anchored vessel cannot start before Aug. 3

Threat of more US sanctions against 55 Bcm/year project

London — Denmark has not yet received an updated plan from the developer of the Nord Stream 2 gas pipeline from Russia to Germany on the schedule for laying the remaining kilometers of the link in Danish waters, the Danish Energy Agency said July 10.

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The Gazprom-owned Nord Stream 2 operating company cannot proceed with pipelaying until it has informed the agency of its schedule.

Just 160 km (99 miles) of Nord Stream 2 is left to lay in Danish waters out of the total 2,460-km length.

"The DEA has not received an updated schedule yet," an agency spokesman said.

The condition in the Danish permit relating to the schedule states: "Before laying of the pipelines commences, Nord Stream 2 AG shall submit an updated schedule for the project, including the anticipated timing of laying of the pipelines."

The DEA does not have to approve the schedule, the spokesman said.

A spokeswoman for Nord Stream 2 said when it was ready with a plan, it would update the DEA. "We are still considering different options and will inform about our plans in due time," she said.

Anchored vessels

Nord Stream 2 received a boost on July 6 when the DEA approved its request for permission to lay the line in Danish waters using ships with anchors, meaning it could lay the remaining pipeline using the Fortuna pipelaying vessel.

Nord Stream 2 had asked -- as a precautionary measure -- for an amendment to its Danish pipelaying permit to allow the potential use of pipelaying ships that use anchors for positioning.

The Fortuna left the German port of Mukran -- where the remaining Nord Stream 2 pipe is stored -- on July 7 and sailed to Danish waters.

However, the decision to allow the use of vessels with anchors cannot be acted on until a four-week appeal period ends, implying work using the Fortuna is not possible until August 3 at the earliest.

"There is a four-week appeal period from the time the decision is made public -- that is from July 6," the DEA spokesman said.

"Anyone with a significant and individual interest in the decision can appeal to the Energy Board of Appeal. Accordingly, the decision cannot be utilized until the appeal period has expired," he said.

This means that Nord Stream 2 cannot use pipelaying vessels with anchors before the end of the appeal period, but it could still use vessels with dynamic positioning under the terms of the original permit from October 2019.

The DEA spokesman said that an appeal to the Energy Board of Appeal against the decision to allow the use of anchored vessels does not have immediate suspensive effect "unless the Energy Board of Appeal decides otherwise."

That means that even if an appeal is lodged against the decision, Nord Stream 2 would likely still be able to proceed with the pipelaying using the Fortuna from August 3.

Akademik Cherskiy

According to the original Danish permit from October last year, pipelaying ships, such as the Pioneering Spirit used by Switzerland-based Allseas to lay much of the pipeline before the US sanctions forced it to halt work, should have dynamic- or self-positioning capabilities.

Another Russian vessel -- the Akademik Cherskiy -- has such capabilities, but has not moved from the port of Mukran since it arrived there on May 12, according to S&P Global Platts trade flow software, cFlow.

Nord Stream 2 had hoped to bring the pipeline online by the end of 2019, but first permitting issues in Denmark and then the US sanctions meant the project has been delayed.

The 55 Bcm/year pipeline is crucial to Russia's plans to scale down from 2021 the use of the Ukrainian transit corridor in its gas supplies to Europe.

The US though is pressing to introduce expanded sanctions against the project that would target more companies involved in laying the line's final segment, including service providers and insurers.

Last week, German Chancellor Angela Merkel said it was "right" to complete the pipeline, saying the US sanctions "did not correspond" to Germany's interpretation of international law.