Germany Says Nord Stream 2 Picked a Ship to Finish Gas Pipeline

(Bloomberg) -- Nord Stream 2 has picked a ship to finish laying sections of its pipeline under the Baltic Sea, a German agency overseeing the work said, indicating the Russian company has found a way to get around U.S. sanctions that have halted the project.

Germany’s Maritime and Hydrographic Agency said on Tuesday “it assumes” the company building the natural gas pipeline will use the Akademik Cherskiy. If confirmed, it would end the mystery about how the Russia’s gas export company Gazprom PJSC will finish work after Switzerland’s AllSeas Group SA pulled out of the project last year.

The 9.5 billion-euro ($11.2 billion) will bring Russian gas directly into Germany, fanning tensions with U.S. President Donald Trump, who says Europe already is getting too much of its energy supply from its eastern neighbor. Congress in Washington is poised to impose a new round of penalties on companies working for Nord Stream 2, tightening measures imposed a year ago.

Russian Energy Minister Alexander Novak last year mentioned the 150-meter-long Akademik Cherskiy as an option for finishing up the gas link, but Gazprom has been silent about which ship it would use. Neither Gazprom nor Nord Stream 2 commented on the remarks from Germany. On Tuesday, Nord Stream 2 said it would name a vessel at a later date and that work could resume on Dec. 5.

Russia is “doing its best” to complete the project, Elena Burmistrova, chief executive officer at Gazprom’s export unit, said last month.

About 200,000 sections of pipeline have been produced for Nord Stream 2, and there are few ships around the world capable of doing the job of laying them down in the seabed. Most of them are owned by western companies, not willing to face U.S. sanctions. Finding an appropriate vessel and preparing it for the job has been considered a key issue for Nord Stream 2 completion and is among the reasons why the project has been halted for one year.

The 1,230-kilometer (764-mile) pipeline was weeks away from completion when work stopped in December 2019. All except 160 kilometers of the pipe have been put in place. The bulk of the remaining section will be in the Danish waters, yet the pipelaying will restart in German territory Dec. 5, Nord Stream 2 said during the weekend. Once that’s done, it will have to be connected to the infrastructure onshore in Germany.

The Akademik Cherskiy is currently located offshore Russia’s Baltic port of Kaliningrad, according to ship-tracking data in the Bloomberg Terminal.

The vessel has a dynamic positioning system, and can lay down pipelines without anchors. Those systems are preferred by regulators since they reduce the risk of encountering unexploded bombs at the bottom of the Baltic Sea.

The ship was built in China and was recently sold by Gazprom to Samara Thermal Power Foundation, according to the Russian ship registry. ICIS estimates the Cherskiy can set down pipe at about a third of the speed as the vessel that Allseas was using.

Allseas had a fleet of six vessels including three pipelayers working for Nord Stream 2 -- Solitaire, Pioneering Spirit and Audacia. While the first two ships are dynamically positioned, Audacia was being converted into an anchored vessel for its work in German waters.

In addition to pipelaying vessels, more support vessels are also needed for making the trip each day from the logistics hubs where pipeline sections are stored to the construction site. Eight supply vessels were used for construction of the original Nord Stream link that runs parallel to Nord Stream 2.

Other vessels that could help Russia to Finish Nord Stream 2 include:

• Finval

Finval is an anchor handling tug supply vessel, used to handle offshore instillations. It is near the Baltic coast of Lithuania, according to Bloomberg ship-tracking data.

• Umka

Umka is also an anchor handling tug supply vessel, owned by Russia’s Federation, according to a Russian ship registry. It is near the Baltic coast of Lithuania, according to Bloomberg ship-tracking data.

• Ostap Sheremeta

The Russian supply vessel Ostap Sheremeta is a supply vessel, meaning it’s capable of bringing equipment, personnel and goods to pipe-laying vessels.

It is owned by St. Petersburg-based company Nobility, according to the Russian ship register and currently located at Kaliningrad’s port, Russia, according to Bloomberg ship-tracking data.

• Ivan Sidorenko

It is a Russian supply vessel, originally built for Gazprom’s ship-owning subsidiary, but also now operated by St. Petersburg-based Nobility, according to a Russian ship registry. It has left Kaliningrad and is sailing in the Baltic Sea, according to Bloomberg ship-tracking data.

©2020 Bloomberg L.P.