Russia launches first gas link to Western Europe

Russia on Tuesday inserted the first gas into a controversial undersea pipeline that for the first time will bypass nations such as Ukraine and deliver energy directly to Western Europe. The 1,220-kilometre (760-mile) Nord Stream project was agreed in 2005 by then German chancellor Gerhard Schroeder and Russian Prime Minister Vladimir Putin -- at that time serving as president -- amid opposition from some other EU states. Both men's attendance at the first gas ceremony outside his native home city of Saint Petersburg coincided with the second serious flare-up over energy prices between Moscow and Kiev since 2009. "The volume of gas (the link will eventually pump) is equivalent to the energy of 11 nuclear power plants," Putin told Schroeder in reference to Germany's recent decision to give its nuclear power programme by 2022. The launch saw operators begin filling the pipeline with "technical gas" -- essential for creating the pressure to pump gas to its destination in Germany and eventually beyond. The first Nord Stream gas is expected to reach clients at the end of October or November while the second parallel link is expected to be completed by the end of 2012. Deputy Prime Minister Igor Sechin said the link's total cost including financing adds up to 8.8 billion euros ($12.5 billion). Russia is responsible for about a quarter of the gas consumed in the EU and bills the Baltic Sea link as a guarantee against potential supply disruptions in transit nations with which it has rocky relations, such as Ukraine. EU critics counter that this will only broaden Europe's dependence on Russian energy and harm efforts to liberalise the continent's energy market. Schroeder remains a champion of the project and now chairs the Nord Stream shareholders' committee. Putin unexpectedly announced the impending "technical launch" of the pipeline on Monday during a regional party conference. "Gradually, in a calm manner we are departing from the diktat of transit states," Putin said in a clear reference to Ukraine and the two neighbours' latest dispute over prices. The Russian government said in a statement that its target list of nations for the new link includes Britain and France along with some other smaller EU states such as the Netherlands. It added that European gas consumption should grow in the coming decade by 200 billion cubic metres per year -- a jump of 50 percent. Nord Stream would account for 55 billion cubic metres once its capacity doubles by 2013. Russia has long been seeking ways to move gas directly to the richer European nations while bypassing former ex-Soviet nations with which it has often unpredictable ties. But a similar project called South Stream that would run under the Black Sea to Bulgaria has encountered repeated delays and is not expected to ship its first gas until year-end 2015 at the earliest.