The far reaching arm of Nord Stream 2

Nord Stream 2 is expected to have significant economic effects on the energy market and the European economy as a whole.

Nord Stream 2 is a major expansion of the existing Nord Stream – an offshore natural gas pipeline running from Vyborg, Russia to Greifswald, Germany. Operated by Nord Stream AG, whose is majority owned by Russia’s Gazprom, the pipeline is 1,229 mm in diameter and runs a total length of 1,222 km.

In May 2018, construction began on the expansion project, which would see the 55 billion m3 capacity of Nord Stream doubled to 110 billion m3. Already consisting of two pipelines in the Baltic Sea, the addition will consist of two parallel pipelines running from Narva Bay in the Baltic Sea to Lubmin Germany, each with a length of approximately 1,230 km.

The new pipelines will unlock gas from the Bovanenkovo field, which holds around 4,900 billion m3 and will consist of 200,000 individual steel pipes. Construction officially began on Nord Stream 2 in 2018 and as a major project bringing considerable upsides to both the gas industry and European energy consumers, the economic benefits of the project, should it be successful, seem gigantic.

The construction site at the PIG receiver in Lubmin.

The benefits

Estimates have put the total economic benefit to the EU for the construction of the pipelines at €9.9 billion (US$10.9 billion). With construction in full swing, more than 1,000 contractors across the continent are involved with the project, from small, niche service providers to major international infrastructure firms providing materials and construction.

Approximately 57,500 full time equivalent jobs have been created over five years in the EU for the investment that was made up until December 2018, which has been estimated to add €4.7 billion (US$5.2 billion) in gross domestic product across a range of industrial sectors.

Understandably, countries where the major construction activities are taking place are the largest and most notable beneficiaries of the project. Russia, Germany, Denmark, Finland and Sweden are all feeling the economic upswing a major infrastructure project like Nord Stream 2 brings, while the UK, Norway, Italy and the Netherlands are also profiting thanks to a number of project development and service providers in the oil and gas industry being based in these nations.

A plethora of companies are contributing to the project all down the line, 305 of which are headquartered in Germany, the most of any country. There are 174 contractors are based in Switzerland, while Russian contractors make up 149 of the total number.

Nord Stream 2 has provided a wealth of work. To create the massive lengths of pipe required to build the pipelines, three pipe mills – operated by EUROPIPE, OMK and Chelpipe – were put to work.

Take the largest contributor in this regard, EUROPIPE, which supplied approximately 1,100 km of steel pipe for Nord Stream 2, which was then shipped to Kotka for weight coating. The manufacturing process went at a rate of around 90 km of pipe per month and approximately 2,000 workers have been involved in the pipe delivery process.

Welding on board the offshore pipelay vessel Pioneering Spirit.

For these companies, involvement in the project has led to new confidence in capabilities and EUROPIPE Managing Director Dr Andreas Liessem says the mammoth task has produced new records for the manufacturer.

“By reliably suppling large quantities of quality pipe over such a long period and at such a tight schedule we have achieved a new milestone,” he says.

While just one example, Nord Stream 2 has brought about similar impacts to a range of companies contracted for work. Construction is still ongoing but as is the nature with major oil and gas projects, once the project is operational the benefits will continue to be felt throughout countless economic sectors.

This article was featured in October Edition of Pipelines International. To view the magazine on your PC, Mac, tablet, or mobile device, click here.

For more information visit the Nord Stream 2 website.

If you have news you would like featured in Pipelines International contact Managing Editor Chloe Jenkins at cjenkins@gs-press.com.au

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