Russia Profile - Pipelines

Pipelines

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European Pipeline Network

(Oil & Gas -scroll down for Russia's Oil pipelines)

(source: Gazprom)

At the company's July '07 AGM, Gazprom shareholders approved the basic agreement between the monopoly, German E.On Ruhrgas and Wintershall, Nord Stream AG and Dutch Gasunie for implementing the Nord Stream project (the pipeline running down the Baltic Sea from St Petersburg to Northern Germany). Gazprom plans to sign a number of tax agreements as part of the Nord Stream project, including with Sweden, where a platform may be constructed, thus necessitating the payment of taxes in Sweden (Russian-Estonian relations are not in a constructive phase at time of writing).

The agreement approved by shareholders defines the obligations of the parties in the project. Each must contribute €1.5 billion in capital. If the consortium requires more than €7.377 billion during the construction period, additional proportional contributions will be made to Nord Stream capital, up to 30% of total nvestment. Participants are guaranteed repayment of any loans or credits made to Nord Stream AG and should also bring guaranteed reserve financing, including loans to Nord Stream AG of €3.8 billion.

Nord Stream's ownership structure has not yet been finalised however, as Gazprom seeks an appropriate asset swap with Gasunie. "N.V. Nederlandse Gasunie" specializes in the storage and transport of natural gas. Its pipelines extend 12,000 km. (including links from Holland to the UK) and its underground gas reservoirs have a capacity of 1.1 billion cu. m. It transported 95 billion cu. m. of gas in 2006 and its income exceeded $1.25 billion.

Baltic System

(source: Transneft)