Sweden, Finland okay Russia's Nord Stream pipeline

STOCKHOLM (AFP) - After years of procrastination, Sweden and Finland agreed on Thursday to allow the Russian-led Nord Stream pipeline to pass through their waters in the Baltic Sea, a crucial step for the project destined to supply Europe with Russian gas.

The breakthrough approvals come as new tensions have been playing out between Moscow and Ukraine, raising fears for a new row between the countries that could jeopardise Russian gas supplies to Europe.

By going under the Baltic Sea, Nord Stream's pipeline could free the European Union of the risks posed by disputes between Moscow and the Ukraine, through which 80 percent of Russian gas currently transits on its way to Europe.

One quarter of all gas consumed in Europe comes from Russia.

"The government authorises Nord Stream to build a pipeline in international waters inside the Swedish economic zone," Swedish environment minister Andreas Carlgren told reporters in Stockholm.

A few hours later, the Finnish government issued a statement saying it "granted consent for Nord Stream AG's plan to construct an offshore natural gas pipeline system that would traverse the Baltic Sea."

Denmark agreed to Nord Stream on October 20, leaving Russia and Germany the only countries that still need to officially approve the project.

"This is an important day for the Nord Stream project," Nord Stream managing director Matthias Warnig said in a statement.

"These two permits are further significant milestones for our project and Europe's security of supply," he added.

The Swedish minister said that after 23 months of environmental impact studies requested by his government, it could be proved that "the environmental requirement" of the project had been met.

He added that the basis for Sweden's decision was "that all states are entitled to lay pipelines in international waters and on the continental shelf of a costal state."

Finland also underlined the environmental aspect of its decision and said Nord Stream was required to "take all possible measures to prevent and minimise any damage" to sealife, maritime safety and Finland's border security.

The 7.4 billion dollar (5.0-billion-euro) Nord Stream project is led by Russian state-run energy giant Gazprom in partnership with Germany's E.On Ruhrgas and BASF-Wintershall.

It will link the Russian city of Vyborg and Greifswald in Germany over a distance of 1,220 kilometres (758 miles), going under the Baltic Sea and passing through Russian, Finnish, Swedish, Danish and German waters.

Sweden's approval resolves what had become a dispute between Stockholm and Moscow two weeks before a EU-Russia summit to be held in Stockholm, as Sweden currently holds the rotating EU presidency.

In June, Russia's ambassador to the EU, Vladimir Chijov, asked the Swedish prime minister if Nord Stream was going to be one of his presidency's priorities.

Fredrik Reinfeldt bluntly replied that Sweden "was evaluating the project according to Swedish law."

"We believe in the rule of law," he said.

Russian Prime Minister Vladimir Putin on Thursday thanked Finland and Sweden for approving the project.

"In the name of the Russian leadership, I want to thank our Swedish colleagues and the Swedish government for this decision," he said.

Nord Stream AG wants to start installing the pipeline, formed of two parallel gas tubes, in 2010. Gas delivery to Europe will start in the autumn of 2011, after the first tube is installed, and the entire project should be completed by 2012.

The pipeline has the capacity to bring 55 billion cubic meters of Russian natural gas to Europe per year, which represents 11 percent of expected gas consumption in Europe for 2011.