Nord stream

2: Russia to
Germany
Prof. Aude Pommeret

Nofal Aghayarli
Tayyar Hasanov
Hayssam Barakat
Nader Koubaytri
Overview
• Introduction
• Gas prices
• Gas demand in EU-2050
• Internal gas production in EU-2016
• Analyzing the economic benefits of the Nord Stream 2 project
• Environment
• Conclusion

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Introduction
• The major countries included in the project –
Russia, Germany, Finland, Sweden.

• Pipeline power is 55 bln.m3/year

• The project has a wide range of effects on

many different countries and economic
sectors.

• Economic benefits are likely to arise from the

presence of competitively priced gas in the
European economy and lower decarbonization

Source: Nord Stream 2 AG. costs as a result of lower gas prices competing
with oil and coal.

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Negative factors in EU
• The Netherlands, so far, an important source of
gas for many European countries, has decreased
extraction of gas due seismic problems.

• Denmark, too, is facing a significant fall in

production volumes, as its major gas producing
field, Tyra, had to reduce output for geological
reasons.

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Pareto efficiency?

1 Tanker ~ 260,000 m3 1 Pipeline = 55 bln.m3/year

55 bln.m3/year = 211.000 tankers Constant supply
31,260 JOBS
Price:
Transportation cost + 478€ / 1000 Price depends on contract – 500-800€ / 1000 m3
m3

USA interested in Asia market, as

demand in gas is more than in EU.

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Gas’s price depends on:

• Quantity of gas in storage

• Weather

• Mining power

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Gas demand in EU until 2050
7000
After a period of significant decline 5754 5781
6000
5119 5011 4974 5006 4798 4904 5089 5103 4893
since the financial crisis of 2007/8, 5000
2120 2249
4000
1661 1575 1554 1760 1684 1880 2064 2054 1835
European gas demand has not yet been

TWh
3000

able to fully recover. At its peak in 2010, 2000

3458 3634 3532 3436 3420 3246 3114 3024 3025 3049 3058
1000
total gas demand amounted to some 0
2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
5,781 TWh gcv, and in 2015 had fallen Household,commercial,industry, transport Power and heat Total domestic demand

to 5,010 TWh gcv.

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Internal gas production
in EU-2016 LNG

• The only areas where production might

increase are in Poland and Cyprus.
• Indigenous production is expected to fall by
almost two-thirds,
• EU will need to import more gas from external
sources…
• New sources of supply include some 100 BCM
of spare production…Russia, and large,
untapped quantities in the Caspian region.

odorless Non-toxic
colorless Non-corrosive 8
Analyzing the economic benefits of the Nord
Stream 2 project
Any economic activity, such as setting up a business, making a capital investment or purchasing a service from
established providers will create an impact on the local economy and business eco-system. In this case, the
aim is to understand the effects of the investments made by Nord Stream 2 to build the two new pipelines
through the Baltic Sea…Economic Impact Analysis.

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Analyzing the economic benefits of the Nord
Stream 2 project
Economic Impact Analysis
Examines the effect of an economic event on the economy in a specified area. It studies these effects in terms
of wealth creation (total economic output and value added/GDP) and number of employment opportunities
created, including the value of wages and salaries earned.

Results of economic impact analysis

It should be noted that the effects are different
depending on the economic/industrial structure of
the country in question and the relative cost of labor…
For example, within the EU, any investment will have
a larger impact in Spain (which has a lower relative
labor cost), than in Germany.

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Average Price in €

Average price
690€
In 2020 Stream-2 still under construction :

1000 m3 LPG = 124 €

In October 2021 Stream-2 was already built :

124 € Supply
1000 m3 LPG = 690 €
Gas stockage in %
10% 80%

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Average Price in €

159€

124 € Supply

10% 80% Gas stockage in %

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Environment

Advantages Disadvantages
• Carbon emissions reduction goals • Global warming
• Germany – and the EU – into fossil
fuels “for decades.”
• Detrimental effects on ecosystems

Source: Clean Energy Wire Source: bbc.com

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Conclusion
Conclusion

• 1230 kilometers
• 55bcm/year
• Russia, Germany, Denmark, Finland, and Sweden

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