In the extreme conditions of Russia’s far northern Yamal peninsula, 500km from the nearest town, thousands of workers are drilling 1. 7km through permafrost for a contentious resource. The natural gas from Yamal’s Bovanenkovo field is intended to reach Europe via the Nord Stream 2 gas pipeline – a 1,230km project linking Russia to Germany under the Baltic Sea that has split Europe and sparked threats of sanctions from the US. Critics of the project, due to enter service this year, contend that it will keep Europe hooked on Russian gas and deprive Ukraine of billions of dollars earned from allowing gas across its territory. While the pipeline is more than half-built – with European companies’ financing half of the €9 .5bn cost – it still faces pressure with Denmark delaying a permit to build in its waters. The European Commission has tightened its oversight.
But from Yamal, the companies behind the project – led by Russia’s Gazprom – have a simple message: the abundant gas here will be coming to Europe whatever the obstacles are thrown up by Brussels or Washington. “We will still produce and submit our gas into Russia’s Unified Gas System, which will then distribute it,” said Igor Melnikov, managing director at Gazprom Nadym Dobycha, the unit developing Bovanenkovo, 2,200km north of Moscow. “We see no option of halting production,” he said of a field that is costing Gazprom Rbs5oobn ($7.6bn) to develop corridors can take the gas.” Oleg Andreev, deputy head of the production department at Gazprom, said the company would seek other routes for the gas if NS2 were not ready in December – perhaps even via Ukraine. “Turning off the tap is not an issue,” he said. “In principle, there is a demand for gas in Europe, and the demand is high, and all Gazprom is building Nord Stream 2 with five European partners: Germany’s Uniper and Wintershall, Engie of France, Anglo-Dutch Shell, and Austria’s OMV. Some 670 companies from 25 countries are involved in the construction.
Gazprom and Germany, the project’s main EU supporter, maintain that Nord Stream 2 is needed to replace Europe’s declining gas supplies. European gas demand is expected to reach 564bn cubic metres in 2020 and 618bn cu m.