Nord Stream 2 pipeline edges closer to Danish deadlock

IN THE BALTIC SEA, Sweden (Reuters) - With each 24-tonne steel pipe laid on the seabed of the Baltic Sea, the vessel Solitaire is edging closer to what could be a costly hold-up for the Russian-led gas pipeline project which has divided the European Union.

The crew onboard the Solitaire expect to reach Danish waters early next month, but Denmark has yet to approve the pipeline, which is planned to begin transporting natural gas from Russia to Germany at the end of this year.

“We are now heading for the Danish border and then basically waiting for the further development of the project to be continued from the Danish border toward Germany,” Captain Kenny Houben told Reuters.

However, the Nord Stream 2 consortium controlled by state-run Gazprom told Reuters the project remains on track and that it remains hopeful Denmark will approve the pipeline before the Solitaire reaches Danish waters.

“We are (progressing) according to plan and we are absolutely on the timeline,” Nord Stream 2 spokesman Ulrich Lissek told Reuters onboard the Solitaire vessel.

He added that there were “no major risks or issues” in its dialogue with the Danish Energy Agency (DEA), which is in charge of issuing a permit after an environmental assessment.

Any delay of the 1,230-km twin pipeline would create uncertainty for the firm’s partners: Germany’s Uniper and Wintershall, Anglo-Dutch Shell, Austria’s OMV and France’s Engie and is also key for the future of a gas transit contract between Moscow and Kiev.

With a crew of around 400, the 397-metre Solitaire is welding together and laying the pipeline on the seabed at a speed of 3-4 km per day.

Nord Stream 2 has warned the pipeline could be delayed by up to eight months and cost an extra 660 million euros ($731 million) due to hurdles in getting a Danish permit.

The Danish Energy Agency has completed public hearings and is addressing the responses but it declined to say when a decision would be announced.

If a permit is obtained, Nord Stream 2 will have to wait another month before it can be used, according to Danish law, which gives parties the possibility to complaint up to four weeks after the decision, said the DEA.

Access to cheap Russian gas to offset declining Dutch production takes priority for nations in northern Europe, particularly Germany, but east European countries fear the pipeline will make the EU a hostage to Russian gas while the United States has been a vocal critic as well.

Reporting by Stine Jacobsen; editing by David Evans