The Russia-led Nord Stream 2 consortium abandoned one of three applications to lay the pipeline through Danish territory, according to a statement on June 28.
The project is about half-done. If completed, the pipeline would deliver Russian gas to Europe through two parallel lines along the Baltic Sea’s continental shelf. This would bypass Ukraine’s overland pipelines, costing the nation up to $3 billion in transit fees or 2 percent of the gross domestic product.
The application ran into a two-year delay while awaiting a permit from Denmark’s Energy Agency. The consortium initially applied to lay the pipes near the Danish island of Bornholm in April 2017.
In 2018, Denmark amended its Continental Shelf Act. It now requires the Minister of Foreign Affairs to vet projects in the country’s territorial waters based on national security risks and international considerations.
Previous Danish Foreign Minister Andres Samuelson did not issue a decision on the original Nord Stream 2 route. His successor, Jeppe Kofold, was appointed on June 27.
While facing these delays, Nord Stream 2 submitted applications for two alternate pipeline routes around Bornholm in 2018 and 2019. On June 28, the consortium officially abandoned its original route and set its hopes on the other two.
The alternate routes bypass Bornholm to either the southeast or the northwest. More importantly, they do not go through Denmark’s territorial waters but through its exclusive economic zone.
It is easier to get a permit to go through the exclusive economic zone. These routes do not require vetting by the Ministry of Foreign Affairs and can be approved after meeting the Danish Energy Agency’s requirements, including the environmental review.
The Nord Stream 2 project is the focus of an intense geopolitical clash involving the interests of Russia, Ukraine, Germany and the U.S. Russia and Germany support the construction of the pipeline, while Ukraine and the U.S. are strongly against it.
Ukraine is concerned that it will no longer be guaranteed lucrative orders for transporting Russian gas to Europe through its transit system. The Ukraine-Russia agreement on transit of Russian gas will end on Dec. 31, 2019.
