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Denmark seeks to change law on pipelines amid Nord Stream 2 divisions

COPENHAGEN (Reuters) - Denmark’s government is proposing amending legislation to allow it to ban pipeline projects on the grounds of foreign and security policy due to concerns raised by Russian efforts to build a disputed gas pipeline through Danish waters.

The small Nordic country has been caught in a geopolitical conflict as Russian state gas exporter Gazprom and its partners behind the Nord Stream 2 pipeline seek permission to pump more gas to Europe via the Baltic Sea to Germany.

“We want to have the possibility to say yes or no from a perspective of security and foreign policy,” the minister of energy and climate, Lars Christian Lilleholt, told Reuters, adding that it was currently only possible to veto such projects on the grounds of environmental concerns.

The EU is divided between eastern European and Baltic Sea countries that see a new pipeline carrying Russian gas across the Baltic making the EU a hostage to Moscow - and those in northern Europe, most especially the main beneficiary Germany, for whom the economic benefits take priority.

Denmark and Sweden earlier this year requested that the European Commission intervene in Nord Stream 2 before the two states agree on permits for the pipeline to pass through their waters. EU diplomats said there was little scope for either nation to block the plan.

The current regulatory framework does not allow Denmark to say “no” to the construction of transit pipelines in territorial waters on the basis of foreign policy considerations, the ministry said in a statement.

Lilleholt said the go-ahead for the pipeline was not a matter for Denmark alone.

“It is a question of establishing a very important pipeline from Russia to Europe, this is not only a question for Denmark,” he said.

EU sources have said the Commission, sensing that there may ultimately be no legal basis to block approval of Nord Stream 2, is delaying it as long as possible.

But last week, the EU said it was seeking a mandate from members to negotiate with Russia. Lilleholt said he saw this as “very, very positive”.

Nord Stream 2 earlier this week officially delivered its application to Danish authorities which now has to decide on permits for it to pass through Danish waters. This assessment will be made on the basis of existing rules, the ministry said.

The Nord Stream 2 project has previously said it does not see it as a task for the European Commission “to make a political judgment on whether investments are needed by the market or not”.

Denmark’s right-wing minority government would now negotiate with other parties to win support for the proposal.

Reporting by Stine Jacobsen; Editing by Ros Russell