Sweden won't block Nord Stream harbor deals, but raises defense concerns

STOCKHOLM (Reuters) - Sweden’s government said on Tuesday it would not stop two municipalities from leasing two harbors to Russia’s Gazprom to facilitate the construction of the Nord Stream 2 gas pipeline, despite concerns about security.

“The use of the ports would affect Swedish defense interests in a negative way, and we have informed the municipalities about that,” Defence Minister Peter Hultqvist told reporters on Tuesday.

A deal to lease the two harbors could yield up to 60 million Swedish crowns ($6.5 million) for the island of Gotland and 100 million for Karlshamn, in southeast Sweden.

But the harbors are situated in strategically sensitive areas and both the Swedish military and the security service, as well as the center-right opposition in parliament, have voiced their opposition.

However, both Hultqvist and Foreign Minister Margot Wallstrom have said the Swedish constitution prevents them overruling the municipalities on the issue.

Hultqvist said that, according to current plans, the Nord Stream 2 project would affect implementation of the Swedish defense plan for 2016-2020, which included the reintroduction of a permanent military presence on Gotland.

Gazprom’s 9.9 billion euro plan will double the capacity of the existing Nord Stream pipeline under the Baltic Sea.

It has met resistance from countries such as Ukraine, which is set to lose transit earnings on Russian gas crossing its territory, and others such as Poland and the United States, who say it will make the EU too dependent on Russia, already the source of one-third of its gas.

Running more than 1,200 km (750 miles) from the Russian coast west of St Petersburg to northern Germany, the new pipeline will run parallel to the current one, which has been in operation since 2012, and double capacity to 110 billion cubic meters (bcm) per year by 2019.

Since Russia annexed Crimea from Ukraine in 2014, its military activity in the Baltic Sea has increased, and Sweden this year re-established a permanent military presence on Gotland for the first time since 2005.

Gotland’s municipality is due to make an initial recommendation on the harbor lease later this week.

Reporting by Bjorn Rundstrom; Editing by Kevin Liffey