Fortum seeks investors for Baltic gas pipeline

Nov 22, 2002 01:00 AM

Finnish energy group Fortum said it is seeking investors to join it in building a $ 3 bn gas pipeline from Russia to western Europe together with gas giant Gazprom. Gazprom, one of Russia's biggest companies, said its board had given the go-ahead for the gas pipeline, which is planned to run under the Baltic Sea and be operational by 2007.

Fortum established North Transgas in 1997, a 50:50 joint venture with Gazprom to develop, own and operate the new 1,200 km-plus pipeline. "The next phase to get new investors into the company," Fortum's head of gas operations Bo Lindfors told. He added talks would take place with Gazprom to discuss details of how the project would go forward and it was too early to speculate much money Fortum could pump into the project. Financial support from the European Union remained a possibility, he said.
"When we have all the capable and interested parties involved, we will agree on a final route (for the pipeline) and financing," Lindfors said. Lindfors said discussions had been held with several firms, including Germany's Ruhrgas and Gasunie, a Dutch unit of German E.ON.

The pipeline was initially designed to ship up to 30 bn cm of gas yearly from western Siberia to Finland and then under the Baltic Sea to Germany. Gazprom said the link could also supply Denmark, Britain and Sweden, home to Fortum's Stockholm utility Birka Energi.
Gazprom supplies western Europe with 130 bn cm of gas a year -- about a quarter of its gas imports -- mainly via a pipeline crossing Ukraine. But it has strained relations with Ukraine and Belarus, making an alternative Baltic route all the more attractive.

Source: The Russia Journal Daily
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