Russia and Germany in particular are behind the project on the basis of a September 2005 agreement made between President Vladimir Putin and the then Chancellor Gerhard Schröder.
The company Nord Stream, registered in Switzerland, was established to implement the project, in cooperation with the Russian state-owned company Gazprom, which retains a 51% majority stake-holding in the enterprise. The fact that Schröder himself became the Chair of its Shareholder Committee was perhaps meant to give authority to the project, though retrospectively, it has only obscured the project's image in terms of transparency.
A European project or a Russo-German pact?
Nord Stream is currently advertising the NEGP as a major Russian-EU infrastructure project. Indeed, for those supporting the project, it supposedly brings increased energy safety by adding capacity and an additional transit route. For others however it signals a decline in energy security as it adds to the EU's energy dependence on Russia. Some go even further and interpret it as a tool for Russia to play-off EU Member States against each other, and as a particular expression of the growing bilateralism in Germany's relations with Russia.
Poland in particular has complained to anyone that will listen that Germany did not consult it before taking the decision. Should a new gas pipeline be needed, Poland would have preferred an onshore pipeline through its territory, which it claims would have been, economically, more logical.
The underlying reason for this criticism is that current gas pipelines to Western Europe go through either the Ukraine or Belarus and Poland. The current Polish threat analysis – shaped by the Polish leadership's mistrust of both Russia and Germany – is that the NEGP will make it possible for Russia to cut off gas supplies to Poland in political crisis situations. Enabling it to by-pass (and thus 'isolate' Poland) while still feeding Germany with gas.
In April 2006 the Polish Defence Minister, Radek Sikorski, went as far as to state, according to the news agencies, that "Poland has a particular sensitivity to corridors and deals above its head. That was the Locarno tradition, and the Molotov-Ribbentrop tradition. That was the 20th century. We don't want any repetition of that."
The Kremlin reacted by characterising the Polish attitude as "hysterical" while the German government called it an "absurd comparison".
The Baltic Sea gets a new island
The two parallel pipelines are to be built on the seabed beginning close to the Russian town of Vyborg and ending near the German town of Greifswald. It is planned to locate a 900m2 service platform close to the Swedish island of Gotland.
Although the pipeline does not go through the territorial waters of any third country, it does transverse the so-called exclusive economic zones (EEZ) of Finland, Sweden and Denmark.
According to international law, the EEZ is subject to a specific legal regime. This does not however mean that a coastal state could easily, that is, for political reasons, veto the NEGP. All states enjoy such freedoms as laying submarine cables and pipelines in each other's EEZs and placing equipment there associated with the operation of these infrastructures. Yet in so doing, such states "shall have due regard to the rights and duties of the coastal State and shall comply with the laws and regulations adopted by the coastal State".
It is worth noting here that Nord Stream has consciously avoided running the pipeline route through the EEZs of any of the three Baltic States or of Poland, even though this would obviously have made for a shorter route. This clearly signals that Nord Stream does not trust these countries to not invoke the EEZ regulations for politically motivated decisions.
In muddy waters
The EEZ issue however guarantees that the affected coastal states' formal environmental permission is needed. Nord Stream aims also to comply with the 1991 Espoo Convention on Environmental Impact Assessment in a Trans-boundary Context, although Russia itself has not ratified this treaty. Nord Stream has promised to complete its Environmental Impact Assessment by the fall of 2007.
In general then it seems that the environmental risks lie in the construction phase rather than the operational phase. The major areas of concern here have focussed on bird-life habitats, fishing stocks, and on the fact that the seabed is already highly contaminated. As such, the envisaged construction work could disturb these pre-existing harmful sediments spreading them into the environment and making the water even more polluted.
One specific issue here is that of the chemical and conventional munitions on the seabed, dumped there during and after WW's I and II. In its 1994 report, HELCOM identified that about 40 000 tonnes of chemical munitions lay on the seabed. The conclusion was that "the risks connected to the recovery of chemical munitions are high. The Group therefore recommends that chemical munitions from the Helsinki Convention Area are not recovered."
According to Nord Stream, the NEGP route has been planned so that it does not cross the known dump sites, while more detailed investigations of this issue by the company itself will be conducted in 2007.
An object for terrorists, or an espionage base?
The military dimension of the NEGP was first brought up by Russia itself. President Putin said in a TV interview in October 2006 that the Russian fleet's "role is to protect our economic interests in the Baltic Sea region [....] Protecting the Northern European Pipeline, which brings energy resources to our Western European customers, is one of our most important priorities."
As Nord Stream has spoken out strongly against any speculation that the pipeline, or the platform, would make a plausible object for terror attacks, it has nevertheless remained somewhat unclear about what kind of threat Russia and/or the company is preparing to deal with.
Putin's statement however raised concerns in Sweden in particular that the Russian navy will reactivate its patrolling activity close to the Swedish coastline, where the service platform is to be erected. According to Nord Stream, the platform is needed for "maintenance and service of the pipelines, including launch and reception of testing and diagnostic equipment, control of gas parameters, and placement of isolation equipment (valves)".
A new dimension to such concerns was added by a 2006 report from the Swedish Defence Research Agency, written by Robert Larsson. It speculated that the platform and the pipeline itself "could be used as sensor platforms and by that serve intelligence purposes and give Russia a competitive intelligence edge in the Baltic Sea." The object of this intelligence and early warning would be Sweden, the Finnish Navy, or NATO submarines and surface vehicles in the area.
According to media reports in November 2006, the then Swedish Minister of Defence Mikael Odenberg agreed: "The Russians will be able to exploit it as a platform for intelligence collection. This is a problem." Commander Emil Svensson from the Swedish Navy added: "It's technically possible and wise of them
[The Russians] to do so."
In an interview to Swedish Radio in February 2007, Russian Ambassador to Sweden Alexander Kadakin commented on this ongoing Swedish debate rather undiplomatically. He noted that, "I cannot understand what kind of an idiot could report to his superior such a thing", and if Russia wanted to spy on Sweden, no platform is needed as "it is already possible for us today, with satellites in real time, to read the number plate of each any in Stockholm."
Confidence building needed
While official Russian reactions have not helped in confidence building, Nord Stream has nevertheless tried to downplay the ongoing flood of military speculation. There have also been signals emanating from Gazprom that the company's policy is to use private security forces in protecting its oil and gas transports, rather than relying on the Russian navy.
Nord Stream's technical director Dirk von Ameln in turn announced, at the beginning of June 2007, that the Swedish Coast Guard would be the only authority to protect the platform against possible threats, and other Swedish authorities would be "more than welcome" to inspect it.
Undoubtedly however a further raft of confidence building and transparency measures will be needed to turn this Russo-German project into a truly European one.
Constructor: Nord Stream AG
http://www.nord-stream.com
Shareholders:
OAO Gazprom (51%), Wintershall AG (24.5%),
E.ON Ruhrgas AG (24.5%)
Estimated investments: Min € 5 billion
Gas capacities: 55 bcm per annum
(2 pipelines with 27.5 bcm capacity each)
Pipeline length: 1198 km
Max. water depth: 210 m
Project duration: 2005 to 2010 for first pipeline,
until 2012 for second pipeline
Pipeline diameter: 1.22 m
Design pressure: 220 bar
Wall thickness: 30-45 mm
By Christer Pursiainen, previous Senior Research Fellow at Nordregio