No Politics in North European Gas Pipeline Deal – Russian Defense Minister

BERLIN. Sept 13 (Interfax) – There is no politics involved in the plans to build the North European Gas Pipeline (NEG), said Russian Defense Minister Sergei Ivanov.

“There is no politics in this issue. There might be some phobias in Latvia or Lithuania, but there is no politics here,” Ivanov told journalists in Berlin on Tuesday.

“One of the phobias today is the threat to environmental security in case the pipeline is laid on the Baltic Sea floor,” Ivanov said.

“We should bear in mind the interests of our Eastern European partners, but we should not give them the chance to freeload off the transit of Russian energy resources” to Europe, Ivanov said.

The construction of a gas pipeline on the Baltic Sea floor “will not influence the existing routes for Russian gas transit to Europe,” he said.

On September 8, Gazprom and two German companies, BASF AG and E.ON AG, signed an agreement on the construction of the North European Gas Pipeline through the Baltic.

The pipeline is to run from Russia’s Vyborg to Greifswald on the northern coast of Germany. The pipeline will be integrated in the pipeline systems of WINGAS, a joint venture of Gazprom and BASF’s subsidiary, Wintershall AG, and E.ON Ruhrgas AG.

Under the agreement, the partners plan to set up a German- Russian entity, North European Gas Pipeline Company, in which Gazprom will hold 51% and BASF and E.ON 24.5% each.

The route for the over 1,200-kilometer-long pipeline through the Baltic will be adjusted based on the results of a technical- economic analysis. Preliminary research of the seafloor’s structure has been done.

The NEG is to be brought into operation in 2010. At the first phase, it is planned to build a string with a throughput capacity of some 27.5 billion cubic meters of gas a year. The project also provides for the construction of the second string to increase the NEG’s throughput capacity to 55 billion cubic meters of gas per year. Overall investments in the NEG project will top 4 billion euros.