NORD STREAM 2: 2020

PLATTS - 21 Nov 2019 - The Nord Stream 2 gas pipeline directly linking Russia and Germany via the Baltic will come online in the middle of 2020, Russian Deputy Prime Minister Dmitry Kozak was quoted as saying Thursday by the Prime news agency.

"In the middle of next year," Kozak told reporters in response to a question about when Russia expected the pipeline to become operational.

His comments came just a day after Energy Minister Alexander Novak said Nord Stream 2 might still come online in late 2019, as was originally planned by sole shareholder in the pipeline company, Gazprom.

However, the actual launch date depended on how quickly the operator would resume construction and fill the pipeline, he added.

Denmark granted the final permit needed to complete construction of Nord Stream 2 on October 30. The timeline for work to lay the section of pipeline in Danish waters remains key to when Nord Stream 2 is able to begin flowing gas.

DELAY WEAKENS RUSSIAN POSITION IN TRANSIT TALKS WITH UKRAINE

The potential delay in Nord Stream 2 construction also undermines Russia's position in negotiating a new transit deal with Ukraine's Naftogaz. Ukraine transited some 87 Bcm of Russian gas to Europe in 2018 -- or some 44% of total Russian exports -- but those volumes are set to slump once the planned Nord Stream 2 and TurkStream gas pipelines come online.

The sides have not set a date yet for a new round of ministerial-level talks between the EU, Russia and Ukraine. Although the trilateral meeting is expected to be held in late November, so far only technical discussions on the terms of future Russian gas transit via Ukraine to Europe were held Wednesday via a teleconference.

"Russia is against any gas wars. We are making efforts to ensure they don't happen, so that everything is settled in advance. We have done everything for this," Kozak said of the talks with Ukraine.

Gazprom offered Monday to extend the transit deal with Naftogaz for one year as an extension of the parties' existing 10-year contract or under a new agreement in exchange for Naftogaz dropping all legal claims against the Russian company.

Ukrainian Energy Minister Oleksiy Orzhel deemed the proposal "unacceptable" on national television, but Russia had not yet received an official reply from Ukraine on the proposal, Novak said.

The current deal between Gazprom and Naftogaz expires at the end of 2019, and there is concern that without a new contract from January 1, 2020, Russian gas transit to Europe via Ukraine could be disrupted.

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