"Russia and Ukraine have historically differed on various issues that have led to the interruption of gas transportation to Europe," said Jeffrey Woodruff, Senior Director in Fitch's Energy Team. "The approval by Sweden and Finland allowing Nord Stream to be built decreases potential future EU gas supply risk."
Construction is expected to start next year, with the first pipeline planned to be ready for deliveries in 2011 with a throughput capacity of 27.5 bcm per year.
"Scandinavian countries have expressed concerns for several years about the potentially negative environmental impact that Nord Stream could have for them," said Woodruff. "The fact that both Sweden and Finland have now given the go-ahead to the project means a potential major regulatory hurdle has been removed."
Denmark approved the project in October 2009 after reaching similar conclusions as Sweden and Finland regarding the project's ability to meet the country's demands to protect the marine environment. Under current plans, Nord Stream would go through the territorial waters of Russia, Germany and Denmark and through international waters that are part of the exclusive economic zones of Finland and Sweden.
According to the Associated Press, Finland approved the construction with the caveat that builders must supply additional information about the environmental impact to a regional authority. Swedish Environment Minister Andreas Carlgren - who last year expressed concerns about the project's impact on ecosystems in the Baltic Sea - said authorities in his country are satisfied with additional information supplied by pipeline builder Nord Stream AG.
