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Nord Stream 2 contractor in talks over pipelay timetable in Danish waters

Highlights

Allseas to continue with laying operation: spokesman

Start of construction depends on number of factors

Timeline could see pipeline completion by end-Q1 2020

London — Switzerland-based Allseas -- which has been integral to laying the controversial Nord Stream 2 gas pipeline from Russia to Germany -- is in talks with the pipeline operator on the timetable for laying the Danish section of the link, a company spokesman said.

The timeline for work to lay the section of pipeline in Danish waters will be key to when Nord Stream 2 is able to begin flowing gas, with wider implications for the European gas market -- including whether Russia's Gazprom agrees a new transit deal with Ukraine's Naftogaz.

"Allseas will continue installing the Nord Stream 2 pipeline. The exact planning and timeline are being discussed with our client," the spokesman said.

The Danish Energy Agency on October 30 said it had granted a permit to the Nord Stream 2 operator to build the section of the pipeline in Danish waters southeast of Bornholm in the Baltic Sea.

Last week, Nord Stream 2 told S&P Global Platts that the actual start of construction depended on the consideration of a number of legal, technical and environmental factors.

"This will take a few weeks. We have the necessary capacities to continue construction and to complete the project as soon as possible," the Nord Stream 2 spokesman said.

"We are currently finalizing the detailed timeline, vessel deployment and logistics," he said.

CONSTRUCTION SCHEDULE

Nord Stream 2 -- which will double the capacity of the gas corridor via the Baltic Sea to Germany to 110 Bcm/year -- was due to begin flowing gas by the end of 2019.

However, according to the Gazprom-led operating company, it will take approximately six to eight weeks to lay each string at an average of 3-4 km a day.

This, though, will depend on the weather conditions and the permit conditions.

If the two strings are laid one after the other -- which was suggested as a plan in the permitting application -- the entire operation could take 12-16 weeks.

Should laying begin by the start of December, the range for likely completion would then be early March to early April.

However, if the two strings can be laid at the same time, the timeline would be much shorter.

Nord Stream 2 declined to comment on whether the strings would be laid at the same time or one after the other.

A commissioning phase would then follow before first commercial gas flows.

At the time of the Danish permit award, Nord Stream 2 still had to lay 336 km of pipeline.

For each of the two strings of the pipeline there is 5 km in Sweden, 147 km in Denmark and 16 km in Germany.

Nord Stream 2 still faces significant opposition from the European Commission, countries in eastern Europe and the US, which all say the pipeline concentrates too much export capacity to Europe via just one route from one source.

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

--Edited by Alisdair Bowles, alisdair.bowles@spglobal.com