Nord Stream hits Swedish hurdle

Sweden said it wants the Nord Stream gas pipeline partners to provide a report assessing the environmental impact of alternative routes before Stockholm makes a final decision on whether to of the planned pipeline, which would cross Swedish waters.

"What we are now saying is that the environmental analysis should include alternative ways of taking the pipeline across the Baltic," Swedish Environment Minister Andreas Carlgren told reporters in the Norwegian capital Oslo today.

Carlgren said on the sidelines of a meeting between Nordic states in the Norwegian capital Oslo that Nord Stream, set up by Russia's Gazprom, German BASF and E.ON, intended to submit its analysis in December.

"Our evaluation of this analysis will be very ambitious and thorough and... (it) will form the basis of our decision on whether or not to grant the permit," he said.

Sweden, Finland and the Baltic countries are concerned that the subsea pipeline from Russia to Germany could damage the environment by running through waters containing chemical waste and unexploded World War II munitions.

The small Baltic states and their bigger neighbour Poland also view the plan with scepticism for political reasons, saying Nord Stream could allow Moscow to cut flows through on-land pipelines to western Europe that also supply the transit countries with energy.

"The information that we have today indicated that the pipeline is projected to be passing through areas considered environmentally problematic and risky - where there are both mines and chemical waste and weapons," Carlgren told Reuters.

Last month Estonia rejected an application to survey its part of the Baltic seabed, forcing Nord Stream to re-route the planned 27.5 billion cubic metres per year pipeline further north through Finnish waters.

The pipe is due to come on stream in 2010, with a second planned line to double capacity to 55 Bcm per year later.

Finland has said it is in favour of more gas transport capacity between Russia and western Europe and it is assessing evironmental risks of the link through its waters.

Carglren said a safer alternative could be a more eastern route, which would effectively shift the link south and possibly into the territorial waters of the Baltic states.

"The information we have recieved from the company gives the impression that a more eastern path for the pipe would give better potential to avoid environmental problems," he said, adding that Sweden had informed the Baltic states of its views.

"Now the company must account for other possible routes for the pipeline...and explain why the proposed route is better."

Meanwhile, Dutch gas company Gasunie said today it hopes to strike a deal for a 9% share in the Nord Stream pipeline project by the end of the year.

"We have made considerable progress, and I'm quite optimistic about the chances of concluding with the current partners before the end of the year," Gasunie boss Marcel Kramer told reuters.

"We have discussed a 9% participation for Gasunie."

Russia's Gazprom holds 51% of the project. The deal under discussion could see Gasunie taking a 4.5% stake from both BASF and E.ON. E.ON and Wintershall, part of BASF, currently hold 24.5% each.

Gazprom could receive a 9% stake in another Dutch firm, BBL Company, which is building a gas pipeline linking the Netherlands with Britian. Gasunie owns 60 percent of BBL, with E.ON Ruhrgas and Belgium's Fluxys owning 20 percent each.

"There we have had detailed discussion and we are likely to decide fairly soon," Kramer said of the possible involvement of Gazprom in the Dutch pipeline.