Meeting with Nord Stream representatives (1)
Archived Articles 15 Oct 2009 Mari-Ann KelamEWR
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IRL faction in the Riigikogu (Estonian Parliament), October 14, 2009
Compiled by Mari-Ann Kelam

Romans Baumanis (Nord Stream Regional Advisor for the Baltic States) gave the introductory overview and answered most of the „hard“ questions as he said. Simon Bonnell (Finnish Task Force manager, engineer, expert on munitions) and Romke Bijker (independent consultant part of NSP Finnish Task Force) dealt mostly with the environmental and security issues.

From the presentation:

Baumanis: Nord Stream is a „very small part“ in the big picture. Cost 7.4 billion Euros – 30€ from shareholders and 70€ from banks. Purely commercial considerations are driving this project. It is something simple, nothing virtual, very viable. They hope to have the building permits by end of December and to start construction no later than April 2010. Percentages: Gazprom 51%, Wintershall 20%, e-on Ruhrgas 20%, Gasuni (Dutch) 9% French are interested in joining – their shares will come from the Germans. „The people here today are basically engineers, but we will try to answer your questions.“

Q & A

Kelam: Beginning this kind of project in an ecologically and politically sensitive area you must expect political questions. During Soviet times, when freedom of speech was restricted at best, much of what people felt and thought was expressed through humor. Currently there is a joke circulating that there should be no environmental concerns about the pipeline because it never was intended to carry gas. [Laughter] My question concerns the reliability and availability of gas supplies from Russia. It seems that Russia is at times even unable to supply its domestic market adequately.

Baumanis: Nord Stream is not buying or selling gas. We are running an infrastructure project to build a pipeline. Bankers scrutinized this with a magnifying glass, they are looking much more seriously – they want their money back. Annual growth of gas production in Russia is 200 million…. The gas will not come from one or two fields, but from the whole grid. Gave some statistics from Gazprom.

Kelam: In light of the economic problems in the world today which many feel are caused at least in part by bankers, please comment on which banks are involved in this project and their assessments and the reliability of statistics from Gazprom.

Baumanis: Banks have made mistakes, they would be suicidal to do it twice. They have learned from their mistakes. We need TRUST. 34 banks have replied to the proposal, there will be a consortium. The names will be available.

Trivimi Velliste: Asks about potential security risks, terrorist threats.
Nordstream (Baumanis & Bonnell): Pipeline is the safest means of transporting gas. An attack would require a military type of attack. Extremely remote possiblility. As a terrorist target, there is not much sense in attacking a pipeline.
Velliste: Perhaps for the underwater part, but what about both ends of the pipeline which are above ground?
Nordstream: There will be regular external inspections (annual). 24/7 monitoring based in Switzerland. There are more effective terrorist targets than a pipeline. Compressor station is Gazprom’s; receiving station is Wintershall’s responsibility. „There are no plans for an increased naval presence.“ „Baltic fleet will not be looking after it.“

Tarmo Kõuts: Many good, connected questions about the mines and other hazards under the sea. Estonians have found that mines do shift.

Nordstream: Munitions clearance will be done in the corridor – an explosion outside 25 km will not damage the pipeline. We have surveyed 17,000 objects – no eveidence that thye move. If pipeline ruptures for some reason, a gas column will come up through the water, gas will be shut off. Wouldn’t really have an explosion, possibly under exceptional circumstances a fire. If a ship were in the area…
Certifying authorities have verified our design. We have not seen the work of Estonian experts. Risk assessment has been certified by the certifying authorities. We have analyzed possible poisons and chemical warfare residue along the route. There are 3 chemical objects 16-18 meters (?) from the pipeline route.

Kelam: You are based in a non-EU country, Switzerland. Nevertheless EU rules need to be considered. EU is moving in the direction of separating producers and suppliers. How will Gazprom’s role fit into that?
Nordstream: The absence of a common energy market in the EU is a problem. Energy future of Europe has not been decided.

Erki Nool: Estlink 1 ja 2 between Helsinki and Tallinn?
Nordstream: Dialogue is on-going. We see no impact on the cable. Second cable would be put on top of the pipeline.

Marko Mihkelson: If they are not going to patrol the pipeline, why did Russians recently carry out two big military exercises part of which were aimed at practicing protecting the pipeline.
Nordstream: Was a developer and have never had any contact with the military. Naval activity is virtual – there is no way to protect the pipeline with the navy. No grounds to think …
Shipping is free, but military exercises must be announced and agreed under international law. Baumanis: I do not understand the concern on this issue. I am speculating, perhaps I should not do this.
Bonnell, Bijker: Pipeline on land is far worse for security and environmental impact. Takes much more time to build, much more complicated.

Andres Herkel: Cites a study showing that Russia has used gas cutoffs for political ends at least 57 times. Having Schroeder on board is very bad PR, at the least.

Baumanis: On the Nansen Institute website there is a report by Bendik SolumWhist which says that there will never be a single truth about this issue, it depends on your historic perspective. Historical diversity of the area is complicated. People evaluate it from different perspectives.
Bijker: Comparing Baltic to North Sea. Baltic seabed is more stable than the North Sea seabed. It is relatively simple. But there is a vulnerable and less resilient environment. Installing pipeline does not involved dredging or trenching - only in places where there are rocks. It is a very large project, but there is very little impact compared to North Sea.

Herkel or Mihkelson: What are three problems you see?
Bijker, Bonnell: 1. Highly irregular seabed, 2) existence of mines 3) Contaminated sediment It has been fascinating dealing with all these people. Gas pipeline is not an issue in the North Sea – there they are used to it, they have pipelines already. Fishing issues are really minor, but of course there will be some compensation paid to fishermen. But it is the first pipeline here in the Baltic Sea and therefore there more concerns.

Mihkelson: How many mines do you estimate this will have to be removed?
Bonnell; We have two munitions permits from Finland. For the second one there will be less than one hundred mines. Associated problems with mine removal – sediments released into the water, shock waves can be injurious to marine life, effects on thrid party shipping.

Kelam: In your presentation papers I see that soon bids will be taken for constructing a SECOND pipeline?
Nordstream: Yes, it is all decided, this has been part of it from the beginning, foolish to do these things separately. It would be dangerous to start to lay a second pipeline next to one that is already active. Corridors already exist.

The meeting ended with some Riigkogu members going to attend the day's session and some informal conversation continuing...
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