ICIS: Gazprom ship-or-pay natural gas transit volumes reduced for Nord Stream

Pipeline operator Nord Stream has reached an agreement with Russian Gazprom to lower the ship-or-pay natural gas volume in Gazprom's transit contract from the Nord Stream pipeline's full capacity of 55 billion cubic metres (bcm)/year to 40bcm/year, a source at Gazprom confirmed to ICIS on Tuesday.

The Nord Stream pipeline takes Russian natural gas from Vyborg under the Baltic Sea to Greifswald on the German coast. The ship-or-pay deal means Gazprom agrees to pay for contracted transportation capacity, even if it does not use it.

The decision to lower the ship-or-pay volumes was made last November when it became clear that completion of the onshore NEL pipeline running east-west across Germany would be delayed until the end of 2013, the Gazprom source said. He added that the lower ship-or-pay volumes would apply until the commissioning of NEL. NEL's capacity is currently significantly reduced, amounting to only 4bcm/year which represents about 20% of the envisaged total capacity. NEL was originally scheduled to be fully operational in October this year, but in July 2011, a German court ordered a temporary halt to the construction of the pipeline because of security concerns. The consortium expects NEL to reach its full capacity in the second half of 2013 (see ESGM 30 November 2012). Gas from Nord Stream feeds into NEL as well as the OPAL pipeline running north-south from Olbernhau in Germany to the Czech Republic.  MORE