June 2013, Vol. 240, No. 6

Projects

Putin, Dutch Sign Deal Expanding Nord Stream

While meeting in Amsterdam recently, Russian President Vladimir Putin and Dutch Prime Minister Mark Rutte witnessed the signing of an agreement of intent to expand the Gazprom-controlled Nord Stream pipeline system into the Netherlands and potentially to the United Kingdom. The CEOs of Gazprom and of Gasunie, Aleksei Miller and Paul van Gelder, signed the document, following Putin and Miller’s initiative to expand Nord Stream.

This intention forms part of a vast program of building new export pipelines, which in combination with existing capacities would far exceed Russia’s foreseeable gas export possibilities to Europe, or any foreseeable European demand for Russian gas. Russia would ultimately stop using Ukraine’s transit system.

The proposed expansion of Nord Stream would add a third and fourth line to its existing two lines on the Baltic seabed from Russia to Germany; it would reach the Netherlands with those new lines; and it would use the fourth line to deliver gas to Britain through an existing pipeline on the seabed of the North Sea. The third and fourth lines are planned for annual capacities of 27.5 Bcm each, equal to the existing capacities of Nord Stream One and Nord Stream Two. The system’s overall capacity would double from 55 Bcm/y to 110 Bcm/y.

Gazprom’s stated ambition is to increase deliveries to Britain from Bcm (mostly on spot-market contracts) to 40 Bcm through Nord Stream’s fourth line. For those deliveries Gazprom wants long-term contracts as opposed to spot-market deals.