Russia offers Finland gas-timber in swap for use of Nord Stream pipeline

Nov 18, 2008 01:00 AM

Russia has offered Finland low export tariffs on round timber in return for the unrestricted construction of the Nord Stream pipeline.
Prime Minister Putin offered his Finnish counterpart Matti Vanhanen the deal in the meeting in Moscow. Russia will postpone the introduction of sky-high export tariffs on round timber if Finland helps Russia out in the disputed Nord Stream pipeline issue. The Finnish government has been given time to consider the Russian offer.

Finland has been pushing hard for a change in the Russian timber export policy. The boosting of the export tariffs is hitting the Finnish paper and pulp industry hard. By 1 January 2009, the tariffs will rise to $ 50 per cm, which is an increase of several hundred percent compared with the current level.
Russia argues that it needs to increase the tariffs in order to strengthen its own timber processing industry.

Meanwhile, Finland has been reluctant to give the Russian-German consortium Nord Stream access to its continental shelf.
The company plans to start the construction of the 1,200 km long underwater pipeline in 2010, and is under major time pressure to meet schedules. A part of the pipeline will run in Finnish and Swedish continental waters.

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