The most significant contracts for the construction of the Nord Stream project have now been closed. The project is expected to be implemented on time and in accordance with the original budget. 

The Nord Stream Consortium intends to commission Russia’s OMK, Europipe of Germany, and Sumitomo of Japan to supply more than 1 million tons of steel pipes for building the second segment of the Nord Stream project. The value of the contract has been estimated at EUR 1 billion. The German company will be responsible for producing 65 percent of the order. OMK will produce 25 percent of the total volume. The Japanese company will produce 10 percent of the contract quantity. 

The assignment of production orders for the 1 220 kilometers of the second section of the Nord Stream pipeline linking Vybord (Russia) to Lubmin (Germany) pursuant to a tender in January of 2010 will allow for a timely delivery of construction materials to finish the project within the required timeframe. 

Europipe and OMK are already supplying pipe for laying the first section of the Nord Stream pipeline. Sumitomo, the company from Japan, has vast experience with offshore projects.

The cost of the second segment of the pipeline is lower than the cost of the first part due to post-crisis market phenomena, such as fierce competition and the availability of production capacity. In providing tenders for the projects, the consortium received quotes on three times as much pipe as was required.   

The tender to determine the pipe contractors for the second section of the Nord Stream project was conducted separately from an earlier 2007 tender, where suppliers for the first section of the pipeline were chosen. The purchase of steel pipes for the second segment of the project was considered to be the most important issue before the consortium. According to the contracts, Nord Stream will enjoy the benefits of fixed prices on the pipe actually delivered to it. Pipes will be delivered to the construction sites in May of 2010. 

The invitations to participate in the tender to supply pipe for the construction of Nord Stream were issued in February 2009. A total of 6 companies based in Germany, Japan, and Russia received preliminary qualifications and could enter the bidding process. Pre-qualification was granted on the basis of an existing record of production. Suppliers taking part in the tender were required to show the ability to produce big quantities of large-diameter steel pipes capable of withstanding high pressure.  

The building of the Nord Stream Pipeline is scheduled to begin in April of 2010. The construction of the second section of Nord Stream will begin in 2011. By the end of 2009, the Nord Stream consortium obtained the required permits and authorizations from the governments of countries, whose waters it will cross, including Russia, Germany, Finland, Sweden, and Denmark. 

The volume of gas imported into the EU in 2007 was 312 billion cubic meters. Economic models indicate that yearly imports are likely to rise to 516 billion cubic meters in the next two decades. The Nord Stream project will meet almost a quarter of the additional demand. The project stands to guarantee long-range energy security for European customers. Nord Stream will also be a major breakthrough in the energy cooperation between Russia and the European Union. The first of the 2 pipelines running parallel to each other will be operational in 2011. The lines will both be 1 220 kilometer in length. When both pipelines enter service, the combined transport capacity will be 55 billion cubic meters – a volume required to supply 26 million consumers in Europe.  

Nord Stream AG consortium is a joint venture partnership formed to make construction arrangements and later operate the offshore gas pipeline across the Baltic Sea. Gazprom has a 51 percent stake in the project. The German companies BASF/Wintershall Holding AG and E.ON Ruhrgas AG hold 20 percent each, and the Dutch gas infrastructure company N.V. Nederlandse Gasunie has a 9 percent stake.