The Danish government refused to allow companies building the Nord Stream 2 pipeline to pass through its territorial waters, a move that could delay but not kill the project.
If Denmark sticks to its refusal, Western companies and Russian energy monopoly Gazprom would be forced to change the route of the pipeline that will carry up to 55 billion cubic meters of gas under the Baltic Sea between Russia and Germany.
According to a post by Ukraine’s Naftogaz CEO AndriyKobolyev on his Facebook page, the Danes cited security reasons in becoming the only country among Finland, Sweden and German to have refused.
Gazprom says it has already built a third of the $11 billion, 1,200-kilometer pipeline that, when completed in 2020, will have the capacity to double the gas-transit capacity of an earlier line – to 110 billion cubic meters.
Completion of the pipeline will hurt Ukraine’s economy by bypassing Ukraine’s land-based pipelines, costing the nation up to $3 billion in transit fees or 2 percent of the gross domestic product.
Russia applied for authorization in August 2018. Since Denmark refused, it means that either Gazprom will reapply, subjecting the project to another refusal, or it will seek an alternative route.
Kobolyev concedes that the refusal is not fatal to the project, but says the delay might make it more costly.
The completion of the pipeline would increase the European Union’s dependence on Russian gas, which worries the West. The United States, in particular, lobbied the Danish government to refuse.
On March 25, the U.S. House of Representatives passed the European Energy Security and Diversification Act with strong bipartisan support to diversify Europe’s energy sources and secure it from dependence on Russia.
Considering that Russia provided 37 percent of Europe’s natural gas in 2017, completion of the pipeline would likely ensure Russia to become Europe’s main source.
