German Eugal Has Brandenburg's Approval
Germany's Gascade has permission from the federal state of Brandenburg to build a 272-km section of the Eugal [gas pipeline], linking to Nord Stream 2, it said August 17.
Russian exporter Gazprom has said declining UK and Dutch gas production makes NS2 necessary to meet demand in northwest Europe, but very little new capacity is planned to duplicate the NEL, which runs west from its Greifswald landfall and now carries NS1 gas across Germany to the Netherlands.
The 485-km line, with 51bn m³/yr capacity, will run from the Baltic Sea through Mecklenburg-Western Pomerania and Brandenburg to southern Saxony and from there across the border to the Czech Republic. Gascade will start building the pipeline within the next few weeks, it said. The construction of a two-branch pipeline is planned to be completed by the end of 2020. The first string is to become operational in 2019.
Three gas transportation companies joined the project: Belgian Fluxys, Dutch Gasunie and German Ontras. However, the operator will be Gascade, a joint venture between Gazprom and BASF. The first three will each receive 16.5% of the shares in the project. Gascade will retain a 50.5% stake and remain in charge of the project and after completion of the construction, will manage the gas pipeline.
Gazprom-owned Nord Stream 2 (NS2), which is the sole planned pipeline to supply gas into Eugal, is planned to be completed by the end of 2019, but planning permission is taking longer than expected.
Russia has agreed to the NS2 pipeline crossing its exclusive economic zone (EEZ), NS2 said August 14. That means everyone is now waiting for the last permit – from Denmark. If NS2 is no longer able to use its territorial waters, then its operator Gazprom would have to route the line further north in busier shipping lanes and undertake a new seabed survey. Some qualified observers do not expect the line to be operational until summer 2021.
Russian president, Vladimir Putin, met the German chancellor, Angela Merkel, in Germany on August 18 and discussed Russian gas transit across Ukraine post NS2, but no decisions were reached. Keeping transit going once NS2 is functioning will help the Ukrainian economy and so soften some of the opposition in the European Commission to the pipeline. The US administration is opposed to NS2 outright and would rather Europe bought US LNG, but the commercial case for that has yet to be proven.