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News // Politics

Putin insists Europe needs expanded gas pipeline

24 March 2017 , 14:15Daniel J. GraeberNeftegaz.RU702

An expansion to a Russian gas pipeline running offshore to Germany makes sense given production declines in Europe, Russia's president said.

 

Gazprom is one of the dominant suppliers of natural gas for the European economy.

The company aims to increase its footprint with the expansion to its twin Nord Stream natural gas pipeline system that runs through the Baltic Sea to Germany and then onto the European market.

 

Gazprom started calling for tenders to lay the sections of the planned pipeline in the deep waters of the Baltic Sea in early 2016 and maintains the additional components could be in service at some point in 2019.

 

Russian President Vladimir Putin said during a meeting with officials with Germany energy company BASF, a partner to Gazprom, that expanding Nord Stream was a logical solution for the European market.

"Given the growth in consumption [of natural gas] in Europe and the decline in production by our European partners, Nord Stream 2 is an absolutely natural project," he was quoted by Tass as saying.

 

A January report from S&P Global Platts found European demand for natural gas accelerating against declining production, putting a focus on the need for more exports.

 

In January, Gazprom said European regulators were needlessly standing in the way of access to the OPAL gas pipeline to Germany.

Access to OPAL may be necessary if the Russian natural gas company is to twin Nord Stream.

 

A Polish antitrust authority last year found plans to expand Nord Stream might lead to restriction of competition because of Gazprom's dominant position in the country's gas market, a decision that eventually limited Gazprom's deliveries through OPAL.

 

Putin said expanding Nord Stream should not be seen as a move to limit the competition of any transit country or company.

"We are ready to maintain ties with all our partners, including Ukraine as a transit country," he said.

 

Most of the natural gas Russia sends to Europe runs through Soviet-era pipelines in Ukraine.

Contractual and geopolitical disputes between Moscow and Kiev have added a layer of risk to Russia's legacy natural gas transit routes.

 

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