Stream gas pipeline, have released the symbolic valve to open the pipeline, along which Russian gas will be delivered to Europe, bypassing transit countries.

At 1 224 kilometers, Nord Stream is the world’s longest offshore pipeline. The launch of Nord Steam will strengthen the security regime in Europe, said Russian President Dmitry Medvedev at the launch ceremony.

“It is a long-awaited event which signals stronger relations between Russia and the European Union, an event that will enhance the security regime in Europe, including the regime of energy security,” Medvedev said.

Russia expects the European Union will be able to overcome its current difficulties and that demand for gas there will rise to 200 billion cubic meters by 2020, Medvedev said.

Russia is interested in being involved in the development of power generation capacity and gas-distribution infrastructure in Europe, but is counting on no artificial barriers standing in its way, Medvedev added.

“We are interested in the development of gas-distribution infrastructure, erecting modern and environmentally friendly generating capacity, including steam-to-gas power stations. There must not be any artificial barriers on the road of cooperation, even in spite of the differing approaches that are heard,” Medvedev said.

German, French, and Dutch companies are actively involved in the development of Russian gas fields, the President said, and “there is no economically justifiable alternative to our partnership today.”

Russia aims to grow “energy cooperation with our European partners,” Medvedev said. “We will be seeking investments for production and distribution assets. I think that this involvement will make it possible to minimize the risks across the entire chain of energy-supply – from the extraction of fuel to the delivery of electrical power to the end consumer,” he said.

“Russia has always thoroughly fulfilled its contractual obligations in the sphere of energy,” Medvedev said. “Even at the start of the 1990s, when we found ourselves in a complex economic situation, our gas arrived in Europe without interruption,” he said.

Medvedev said he saw no alternative to energy cooperation between Russia and Europe.

“There is no and can be no economically justified alternative to energy cooperation [between Europe and Russia],” he said.

European Energy Commissioner Gunther Oettinger, French Prime Minister Francois Fillon, and Dutch Prime Minister Mark Rutte also participated in the opening ceremony. In all, 420 guests attended the ceremony in the city of Lubmin in north-eastern Germany, where the pipeline goes ashore.

The first strand of the pipeline has a capacity of 27.5 billion cubic meters per year.

The project’s main question is how much gas it will deliver to the Czech Republic and Slovakia through the Ukraine, which currently holds a monopoly on Russian gas deliveries to those markets. A source in the gas market said that gas deliveries to those countries through Nord Stream could total up to 26 million cubic meters per day, or 9.5 billion cubic meters per year. That means that up to two-thirds of gas consumption in those countries will be ensured against Kiev’s transit voluntarism. In addition, gas transit through Ukraine to Germany will decrease.

The international rating agency Fitch has already taken into account that the launch of the new gas pipeline could have negative consequences for Ukraine’s national oil and gas company Naftogaz Ukrainy, whose rating is currently CCC – one level above default. Fitch experts think that the company’s gas transports and revenue will decrease by roughly 20%.

Nord Stream runs through the Baltic Sea from the Portovaya Bay (the Vyborg area) to the coast of Germany. The construction of the pipeline’s second strand will increase its throughput capacity to 55 billion cubic meters.

The Nord Stream project is being implemented by the joint venture Nord Stream A.G., which is owned by Gazprom (51%), Wintershall and E.ON Ruhras (15.5% each), as well as Gasunie and GDF Suez (9%).

Russia’s Gazprom will start supplying Europe with natural gas through the pipeline by delivering 1 million cubic meters per hour, said a director at the Swiss-domiciled Nord Stream AG company.

This will amount to 8.5 billion cubic meters per year, Dirk von Ameln told reporters.

Nord Stream has an ultimate annual shipping target of 27.5 billion cubic meters, which is enough to supply 23 million households. Von Ameln said, however, that it was beyond Nord Stream AG’s control when this target would be achieved. All the company does is providing the transport infrastructure, while it is Gazprom’s prerogative how to use it, he said.

Von Ameln claimed that his company sees Nord Stream as a pipeline that will supplement the planned South Stream and Nabucco pipelines rather than rival them. He added that growing demand for gas in Europe meant that all current pipeline projects would find markets.

He also said gas to be transported through Nord Stream would make a serious contribution to fighting climate change.

Company papers say most of the NEL pipeline, a planned western offshoot from Nord Stream, was ready, and that an 830-kilometer section of the planned 1 224-kilometer second strand of Nord Stream had been welded together.

Von Ameln said Gazprom had rejected an initial proposal to register the Nord Stream company in Germany. The Netherlands and Ireland were other options under consideration, but eventually Switzerland was chosen for logistical and financial reasons. The company is registered in the town of Zug.

“It is undoubtedly a key energy project, which will not only satisfy our European Union partners’ growing needs for gas but also, we hope, give impetus to the intensification of our cooperation in the energy industry as a whole,” Medvedev’s aide Sergei Prikhodko told reporters on November 7.

“It is a practical demonstration of the importance of Russia’s work in diversifying gas supplies to European Union countries,” Prikhodko said.

Nord Stream “is the result of work that has spanned many years and has been difficult from economic and technological points of view, work in the course of which we have unchangeably felt deep pragmatic interest on the part of our principal partners in the European Union, primarily in Germany,” he said.

The Nord Stream project “has required extremely intensive explanatory work from the government of the Russian Federation,” he said. “The builders and designers, as it appears to us, have given very convincing answers to many questions, including questions about the environmental aspects.”

Nord Stream will consist of two parallel lines that are intended to supply Europe with a total of 55 billion cubic meters of gas per year. The first line has an annual capacity of 27.5 billion cubic meters.

Nord Stream will carry gas directly to German and other European consumers.

The 1 128-kilometer pipeline, which lies on the Baltic Sea floor, runs from Vyborg, Russia, to Lubmin, which is located near the town of Greifswald.

Gas transported by Nord Stream will come from the Shtokman and Yuzhno-Russkoye fields.

Construction of the pipeline began in Babayevo, Vologda region, in December 2005.

Russia would consider laying offshoots from the Nord Stream natural gas pipeline, which was ceremonially put into operation on November 8, but there are currently no customers for them, Russia’s energy minister said. “There needs to be requests to that effect. One of our European partners must say, I want some more gas of such and such an amount,” Sergei Shmatko told reporters in Berlin.

No such requests have come so far, and “I have no idea when this may happen,” he said.