Russia expects Nord Stream 2 to deliver 5.6 bcm of gas this year
MOSCOW, Aug 19 (Reuters) - The Nord Stream 2 pipeline, which is currently under construction, is expected to deliver 5.6 billion cubic metres (bcm) of Russian natural gas to Europe this year, gas producer Gazprom said on Thursday.
The $11 billion Nord Stream 2, designed to bypass Russia's political foe Ukraine and double the capacity of the existing Nord Stream pipeline to 110 billion cubic metres per year, has been a focal point of tensions between Moscow and Washington.
The construction of the undersea pipeline to Germany has been hampered by sanctions introduced by the United States at the end of 2019, political tensions and Washington's plans to boost sales of its seaborne liquefied natural gas to Europe.
It is now, however, 99% complete. The project's Swiss-based operating company said on Wednesday the Fortuna pipe-laying vessel is working on the final part of the pipeline.
The European gas market is eagerly awaiting the start of Russian flows via Nord Stream 2. According to EU statistics, gas consumption in the European Union last year amounted to 394 bcm.
European gas prices have been extremely elevated, reaching record highs due to low liquefied natural gas supply, record low storage stocks for the time of year and Russia holding off booking much additional capacity at auctions.
Prices in the Dutch TTF market, the European gas benchmark, dropped on Thursday following the news from Gazprom.
"Much of the risk ahead of this winter is linked to Russia," said Refinitiv gas analysts.
"The core question is when Gazprom can refill storages in Europe. Thus supply via Yamal-Europe, as well as clarity on when and at which level commercial operation of Nord Stream 2 starts, will provide important sentiments to the market in both directions," they added.
Gazprom also said on Thursday that the gas flows via the existing Nord Stream pipeline reached 33.7 bcm in January-July, up from 32.9 bcm in the same period of last year and 31.7 bcm in the first seven months of 2019.
Russian President Vladimir Putin and German Chancellor Angela Merkel are due to meet in Moscow on Friday and most likely will discuss the pipeline.
(Reporting by Vladimir Soldatkin; Additional reporting by Nina Chestney; Editing by Jason Neely, Barbara Lewis and Jan Harvey)
