Sweden gives all clear to Baltic Sea gas pipeline

The Swedish government on Thursday gave its permission for German firm Nord Stream AG to lay down pipelines for transporting natural gas from Russia to Germany through the Swedish economic zone of the Baltic Sea.

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The route for the pipeline will pass through international waters and in a press release on Thursday morning the Swedish government recognises its acceptance of the right of all states to lay pipelines there.

The government has, during the 23 month consultancy process, underlined that the environment of the Baltic Sea is a prioritized area and has demanded that Nord Stream specify any consequences of the project for the sea bed.

"The government has set high demands to ensure that the sensitive environment in the Baltic Sea is not threatened. The company has been required to provide a series of supplementary examinations and has satisfied each stage of the deliberation process," Environment Minister Andreas Carlgren said in the government press release.

The UN Convention on the Law of the Sea has provided the framework for the examination of the merits of the project according to Swedish and international law.

After an exhaustive process of consultation with states bordering the Baltic Sea and within Swedish authorities, the government is satisfied that demands have been met to approve the project.

"We have thus concluded that a yes is the only available decision. The government is satisfied that the planned route is in accordance with Swedish responsibilities to protect and preserve the marine environment," Carlgren said.

Thursday's breakthrough approvals from both Finland and Sweden come as new tensions have been playing out between Moscow and Ukraine, raising fears for a new row between the countries that could jeopardise Russian gas supplies to Europe.

By going under the Baltic Sea, Nord Stream's pipeline could free the European Union of the risks posed by disputes between Moscow and the Ukraine, through which 80 percent of Russian gas currently transits on its way to Europe.

One quarter of all gas consumed in Europe comes from Russia.

Denmark agreed to Nord Stream on October 20, leaving Russia and Germany the only countries that still need to officially approve the project.

"This is an important day for the Nord Stream project," Nord Stream managing director Matthias Warnig said in a statement.

"These two permits are further significant milestones for our project and Europe's security of supply," he added.

Finland, like Sweden, underlined the environmental aspect of its decision and said Nord Stream was required to "take all possible measures to prevent and minimise any damage" to sealife, maritime safety and Finland's border security.

The $7.4 billion Nord Stream project is led by Russian state-run energy giant Gazprom in partnership with Germany's E.On Ruhrgas and BASF-Wintershall.

It will link the Russian city of Vyborg and Greifswald in Germany over a distance of 1,220 kilometres (758 miles), going under the Baltic Sea and passing through Russian, Finnish, Swedish, Danish and German waters.

Sweden's approval resolves what had become a dispute between Stockholm and Moscow two weeks before a EU-Russia summit to be held in Stockholm, as Sweden currently holds the rotating EU presidency.

In June, Russia's ambassador to the EU, Vladimir Chijov, asked the Swedish prime minister if Nord Stream was going to be one of his presidency's priorities.

Fredrik Reinfeldt bluntly replied that Sweden "was evaluating the project according to Swedish law."

"We believe in the rule of law," he said.

Russian Prime Minister Vladimir Putin on Thursday thanked Finland and Sweden for approving the project.

"In the name of the Russian leadership, I want to thank our Swedish colleagues and the Swedish government for this decision," he said.

Nord Stream AG wants to start installing the pipeline, formed of two parallel gas tubes, in 2010. Gas delivery to Europe will start in the autumn of 2011, after the first tube is installed, and the entire project should be completed by 2012.

The pipeline has the capacity to bring 55 billion cubic meters of Russian natural gas to Europe per year, which represents 11 percent of expected gas
consumption in Europe for 2011.