The North European Gas Pipeline (original name: North Transgas; new name will be: Nord Stream) is a planned natural gas pipeline between Russia and Germany. Sometimes name North European Gas Pipeline may refer only to the offshore section of this pipeline.

Construction of the Russian onshore section began on 9 December 2005 in the town of Babayevo (Vologda Oblast), and is slated for completion in 2010. The onshore section in Russia will run from Gryazovets to the coastal compressor station at Vyborg. The lenght of this section will be 917 km long, diameter of the pipe is 1,420 mm and a working pressure will be 100 atm, which will be secured by six compressor stations. Russian onshore section will supply gas also to the Northwestern region of Russia (St. Petersburg and Leningrad Oblast). It will be constructed and operated by Gazprom.

The offshore section of North European Gas Pipeline will run from Vyborg compressor station at Portovaya Bay along the bottom of the Baltic Sea towards Greifswald in Germany, with a total length of 1,189 km. The plan is to build two parallel gas pipeline legs each with capacity 27.5 bmc per year. According to plan, the first leg will be built in 2008-2010 and second one in 2010-2013. The diameter of pipe will be 1,067 mm and the working pressure 217-247 atm. There will be one compressor station in Swedish economic zone, 60 km from Gotland island. The pipeline's offshore section is expected to cost around 4-5 billion Euro, and is being built and operated by North European Gas Pipeline Company (new name: Nord Stream company)

North European Gas Pipeline Company is a consortium in which majority (51%) is owned by the Russian gas company Gazprom, with further 24.5% shares owned by the German partners BASF and E.ON. It's possible that Dutch company B.V. Nederlandse Gasunie will join consortium (in this case Gasunie will own 9% shares and German companies 20% each).

The members of Shareholder Committee are:

• Gerhard Schröder, former Chancellor of the Federal Republic of Germany -Chairman of the Committee
• Alexei Miller, Chairman of the Board of Executive Directors of OAO Gazprom
• Alexander Medvedev, Deputy Chairman of the Board of Executive Directors of OAO Gazprom and Director-General of OOO Gazexport
• Vlada Russakova, member of the Board and Head of Strategic Development at OAO Gazprom
• Eggert Voscherau, Deputy Chairman of the Board of Executive Directors and Director of Personnel of BASF AG
• Reinier Zwitserloot, Chairman of the Management Board of Wintershall AG
• Dr. Burckhard Bergmann, member of the Management Board of E.ON AG and Chairman of the Management Board of E.ON Ruhrgas AG
• Hans-Peter Floren, Chairman of E.ON Ruhrgas Transport AG & Co. KG.

Managing Director of the NEGP Company is Matthias Warnig, former Chairman of the Board of Directors of Dresdner Bank ZAO, Dresdner Bank Russian subsidiary.

The Western European part of the North European Gas Pipeline includes Greifswald-Bunde pipeline, Bunde-Den Helder pipeline and offshore interconnector Balgzand – Bacton (BBL Pipeline).

Russian and German officials claim that the new pipeline will eventually lead to economic savings despite the high investment cost. The reason are non-existing transit fees, as transit countries (Ukraine, Slovakia, Czech Republic, Belarus, Poland) will be bypassed.

On 13 October 2005 Gazprom's export arm Gazexport signed a contract with German gas company Wingas, the joint venture of Gazprom and Wintershall (subsidiary of BASF), to supply 9 bmc of natural gas annually during 25 years from the pipeline's launch in 2010.

On 16 June 2006 Gazprom and Danish DONG Energy signed a contract for 20 years on delivery of 1 bcm Russian gas annually to Denmark with an option of increase in the annual quantities. Under the agreement, Gazprom will start supplying gas in 2011. In addition, DONG Energy will start supplying 0.6 bcm natural gas annually to a Gazprom subsidiary Gazprom Marketing and Trading (UK).

On 29 August 2006 Gazprom and E.ON Ruhrgas signed an agreement to extend current contracts on natural gas supplies and have signed a contract for additional 4 bcm of annual gas supply through the North European Gas Pipeline.

The project started in 1997 when Gazprom and Finnish company Neste (later Fortum) formed joint company North Transgas Oy for construction and operation of the gas pipeline from Russia to Northern Germany across the Baltic Sea. The German partner of this project was Ruhrgas (later E.ON). In April 2001, Gazprom, Fortum, Ruhrgas and Wintershall adopted a statement on joint feasibility study of pipeline. On 18 November 2002, the Management Committee of Gazprom approved a a schedule of NEGP implementation. In May 2005, Fortum withdraw from the project and sold its 50% stake in North Transgas to Gazprom. As a result, Gazprom became a 100% owner of North Transgas Oy. On 8 September 2005, Gazprom, BASF and E.ON signed a basic agreement on the construction of the North European Gas Pipeline. On 30 November 2005, the North European Gas Pipeline Company was incorporated in Zug, Switzerland. On 9 December 2005, Gazprom launched construction of Russian onshore section of pipeline. On 30 March 2006, shareholders’ committee of the North European Gas Pipeline Company hold its first meeting.

The pipeline has drawn criticism internationally, most strongly from Poland, Sweden and the Baltic countries:

• The pipeline is seen as a political move by Russia to bypass transit countries [1]). Poland and the Baltic countries are concerned that a long term plan of the Kremlin is to attempt exerting political influence on them by threatening their gas supply. The recent Russia-Ukraine gas dispute is presented as an example of such tactics. The risk of compromising gas supplies to Western Europe is considered an offset to such a threat, but upon completion of the North European Gas Pipeline this offset will be significantly lessened.
• On the other hand, a direct pipeline from Russia to the heart of Western Europe will put Germany in the same vulnerable position as Ukraine was in the winter of 2005-2006, since Russia will now have the capability to cut gas supplies - or threaten to do so - to Germany alone, without affecting supplies to any other countries, should it wish to exert politico-economic pressure on Germany.
• Doubts have been raised, whether any savings will be gained because the maintenance costs of an underwater pipeline are significantly higher than for an overland route.
• Environmental concerns have also been raised that the construction of the pipeline may trigger the release of chemical weapons lying on the seafloor since World War I and II. [2] Russian officials call these concerns far-fetched and politically motivated by the opponents of the project, pointing at the argument that during the construction the seafloor will be cleaned, rather than endangered. Interestingly, Polish Grupa LOTOS company has its own plans to exploit oil from the Baltic sea area, where environmental concerns do not seem to be an obstacle.
• The dependence upon any single gas supplier has been considered undesirable across Europe, and the new pipeline is seen as a factor in further increasing Europe's dependence on Russian gas. [3]

The Russian response has been that the criticism is caused by bitterness about the loss of potential transit revenues and political influence. Some observers speak of one billion dollars annually which will be lost by Poland. [4] Also the ability to block Russian gas exports to Western Europe will decrease. Although this would cause domestic damage as well, for now, the pure ability to do so adds political weight to the transit countries.

The Swedish government said it feared that a German-Russian project to build a gas pipeline under the Baltic Sea could damage the environment and stir up long-buried toxic materials. Lena Berglund, a spokeswoman for Swedish Environment Minister Lena Sommestad, told to AFP, that both the environment minister and the prime minister have expressed concerns about the environmental consequences. "Construction of the natural pipeline could disturb the Baltic seabed (and) dislodge toxic materials and other things on the bottom which the Baltic could not cope with since it is a particularly sensitive sea," she said. The impact on bird and marine life in the Baltic Sea is also a concern, she added.

Prime Minister Göran Persson was quoted Thursday, 17th August 2006, by the Swedish news agency TT as saying: "There is every reason to warn against the pipeline stretch that the construction consortium has proposed."

"When you build a gas pipeline this big on the bottom of the Baltic Sea, you're going to dislodge a lot of the sediment on the seabed, where there are mines, toxins and other stuff ... in addition to all the other environmental problems the Baltic Sea already has," he said.[5]

The World Wide Fund for Nature (WWF) asked the Contracting Parties to the Baltic Marine Environment Protection Commission (HELCOM) to safeguard the Baltic marine habitats which could be altered by the implementation of North European Gas Pipeline project. [6]

The former Chancellor of Germany, Gerhard Schröder and the President of Russia, Vladimir Putin, were strong advocates of the pipeline project during the negotiation phase. The agreement between Germany and Russia to build the pipeline was signed two weeks before the German parliamentary election. After the election, soon after leaving the post of Chancellor of Germany, Gerhard Schröder agreed to head the advisory committee of the consortium which is to build the pipeline.

This has been widely decried by German and international media as a scandalous conflict of interest [7] [8]. The accusation being that the pipeline project may have been pushed through for personal gain rather than for improving gas supplies to Germany.

Managing Director of the NEGP Company Matthias Warnig reportedly served in the East German secret police Stasi in the 1980's at the same time that the Russian President Vladimir Putin, then-colonel of the KGB (Soviet external security agency and internal secret police) worked in East Germany. As Herr M. Warnig's former colleagues told the press, he had been sent to Dresden in October 1989 to cooperate informally with the KGB. At the time, the KGB was running an operation in the city to recruit key Stasi members, with an eye toward getting its hands on their West German spies. Warnig’s cell, which Putin set up after the fall of the Berlin Wall, operated under the guise of a consulting firm and was recruiting agents for the KGB.

After Herr Matthias Warnig left the secret police in 1989 with the rank of major, he was sent by Dresdner Bank in 1991 to head a new operation in St. Petersburg (Russia), where Putin worked in the mayor’s office.

Documents uncovered in a Berlin archive revealed that Matthias Warnig played a leading role in the controversial forced sell-off of part of the Yukos oil giant pursued by the Putin government.

As was reported in the Telegraph (London) and the Moscow News, the two men are close: "...on one occasion, Mr. Warnig helped to make arrangements for Mr Putin's wife Lyudmila to fly to Germany for urgent health treatment after a car accident, a trip paid for by Dresdner [Bank]". On another occasion, Dresdner Bank offered "travel and living expenses for Putin’s two daughters while they studied in Germany".

• Gazprom
• Russia-Ukraine gas dispute of 2005
• Economy of Germany
• Economy of Russia

• Official pipeline website (English)