08-08-08 The planned Nord Stream gas pipeline will link Russia and Germany under the Baltic Sea, with an anticipated capacity of up to 55 bn cm per year. The project will strengthen Russia's position in the European Union energy market and enhance the reliability of Russian gas transit to Europe. However, Nord Stream has set the commercial interests of German and Dutch energy majors against the environmental and political concerns of the Baltic Sea littoral states.
When constructed, the 1,220-km pipeline will pass through the exclusive economic zones and/or territorial waters of Russia, Finland, Sweden, Denmark and Germany. However, construction of the underwater section of the pipeline can only begin once all five countries have granted permission to the consortium.

European fault lines.
The pipeline has strong support from the European energy majors that are participating in the Nord Stream consortium. German corporations BASF and E.ON each have a 20 % stake in the project, and Dutch state-owned company Gasunie has a 9 % share. European Commission President Jose Manuel Barroso has referred to Nord Stream as a "priority project" for Europe.
In 2006, the EU officially designated Nord Stream a Trans-European Energy network, underscoring the importance of securing a reliable supply of Russian gas as well as a dearth of realistic and commercially viable alternatives. However, the pipeline remains contentious among the Nordic and Baltic states on environmental -- and in some cases, political -- grounds, and the consortium could encounter further delays. The European Commission has never enthusiastically endorsed Nord Stream, and the EU's energy commissioner has underscored the importance of ensuring that the pipeline does not adversely affect the environment.

Earlier this year, the European Parliament passed a resolution criticizing Nord Stream; although parliamentarians have no authority to stop the pipeline's construction, this symbolic gesture highlighted the resistance Moscow may face as it seeks to bolster its dominance of the European energy market.
Furthermore, several EU governments have expressed reservations about the potential effects of Nord Stream on Belarus and Ukraine, currently the main transit routes for Russian gas into Europe. Building Nord Stream (and the planned South Stream pipeline across the Black Sea to Bulgaria) will reduce these countries' economic leverage over Russia, as well as the revenues they reap from transporting natural gas across their territory.

Implications.
Industry experts estimate that by 2015, EU gas requirements will be 100 bn cm higher than at present. This market growth presents important opportunities for Europe's main suppliers, especially Russia. Russia's major target market for Nord Stream gas is not Germany, but rather the United Kingdom.
As the result of the "dash for gas" in the 1990s, over 50 % of UK electricity is generated from gas, and it has the highest proportion of households in Europe with gas heating. Access to the UK market has been a long-term objective for Gazprom, and Moscow hopes that the construction of Nord Stream will help further that goal.

Complex transnational pipelines are financed and built when interests coincide. In this respect, Nord Stream is no exception.
Gazprom has a strong interest in diversifying its supply routes and accessing new markets, just as the EU wants to have more physical infrastructure to diversify future gas imports.