DANISH SECTION NORD STREAM 2

PLATTS - 04 Dec 2019 - Switzerland-based Allseas -- which has been integral to laying the controversial Nord Stream 2 gas pipeline from Russia to Germany -- has started laying the Danish section of the link using its Pioneering Spirit vessel, a company spokesman said Wednesday.

The timeline for work to lay the section of pipeline in Danish waters will be key to when Nord Stream 2 is able to begin flowing gas, with wider implications for the European gas market -- including whether Russia's Gazprom agrees a new transit deal with Ukraine's Naftogaz post-2019.

"I can confirm the Pioneering Spirit is currently installing the pipeline in Danish waters," the Allseas spokesman said.

The Danish Energy Agency on October 30 granted a permit to the Nord Stream 2 operator to build the section of the pipeline in Danish waters southeast of Bornholm in the Baltic Sea.

It was followed by a four-week period after the permit was granted for any appeals to be submitted, which ended on November 28, allowing for construction to begin.

CONSTRUCTION SCHEDULE

Nord Stream 2 -- which will double the capacity of the gas corridor via the Baltic Sea to Germany to 110 Bcm/year -- was due to begin flowing gas by the end of 2019.

However, according to the Gazprom-led operating company, it will take approximately six to eight weeks to lay each string in the Danish section at an average of 3-4 km a day.

The exact rate, though, will depend on the weather conditions and the permit conditions.

If the two strings are laid one after the other -- which was suggested as a plan in the permitting application -- the entire operation could take 12-16 weeks.

With laying having begun at the end of November, the range for likely completion would then be early March to early April.

However, if the two strings can be laid at the same time, the timeline would be much shorter.

A commissioning phase would then follow before first commercial gas flows.

Nord Stream 2 declined to comment on whether the strings would be laid at the same time or one after the other, and also declined to comment on the timetable for operations.

At the time of the Danish permit award, Nord Stream 2 still had to lay 336 km of pipeline.

For each of the two strings of the pipeline there is 5 km in Sweden, 147 km in Denmark and 16 km in Germany.

Nord Stream 2 still faces significant opposition from the European Commission, countries in eastern Europe and the US, which all say the pipeline concentrates too much export capacity to Europe via just one route from one source.

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