Belgian Gas Company Offers to Cooperate with Gazprom on Nord Stream 2 and Trans Adriatic Pipeline (TAP)
On January 24, 2017, Russian publication Vedomosti, reported that Belgian gas transmission company, Fluxys, had announced its willingness to cooperate (financially and technically) with Gazprom on the Nord Stream 2 expansion project. Fluxys is a Belgium-based operator of natural gas networks and infrastructure, facilitating gas transit across the European market with an emphasis on the Netherlands, Germany, Luxembourg, France and Southern Europe.
The announcement comes in the same window as Fluxys CEO, Pascal De Buck, also offered his support for a Gazprom bid to access the Trans-Adriatic Pipeline (TAP), in which the Belgian company owns a 19% stake. TAP is a critical piece of the Southern Gas Corridor pipeline project that is intended to bring online an alternative, non-Russian source of gas, primarily from Azerbaijan. This recent announcement on Nord Stream 2 demonstrates the continued efforts by Gazprom to make Nord Stream 2 a reality, despite the legal and political obstacles it is facing. It also demonstrates the continued support that this project is garnering within certain segments of the European business community. The project would double the capacity for Russia to export natural gas to Western Europe using the underwater Baltic Sea route (with significant strategic and financial implications for Ukraine and certain Central European countries).
The two companies (i.e., Gazprom and Fluxys) have collaborated previously. In March 2016, the entities entered into a framework agreement on small-LNG market cooperation in Europe by developing a network of infrastructure, including import terminals, LNG filling stations and storage for raw materials. In 2015, both parties signed a 20-year contract for transshipment services concerning 8 million metric tons of LNG from Russia’s Yamal LNG project to the coastal Belgian port city of Zeebrugge. Fluxys also possesses a 19% stake in the Northern European Pipeline (i.e., NEL Gastransport GmbH), the western land branch pipeline project that would benefit from an expanded Nord Stream pipeline (as it already receives gas traveling through the existing Nord Stream 1 pipeline).
Gazprom reissued a tender for bids on the $11 billion project in November 2016, seeking new partners on revised terms. Winners will be announced by April 2017, after which Gazprom intends to fast-track construction for completion by 2019 – around the same time its contract with Ukraine ends. This objective, however, will depend on how the project is received between now and then by European partners and government bodies that will need to approve the overall undertaking.