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Nord Stream Price Shoots Up

nordstream010708.jpgIt appears that the controversial Nord Stream pipeline project, which aims to bring natural gas direct from Russia to Germany, is already hitting some cost overruns topping the estimated budget of $5 billion. Just how much more the project will cost will not be revealed until March, according to Nord Stream director Dirk von Ameln, who said they nevertheless intend to begin construction next year despite protests from environmental groups and complaints from other EU members left in the lurch with energy negotiations with Moscow. Just today new Polish PM Donald Tusk, who has had more luck speaking with Moscow than his predecessors, told NewsweekI want to launch an in-depth discussion. We need to demystify the problem. … We need to understand why the Russians are holding out for this project under the Baltic, which is three times more expensive than a gas pipeline crossing Poland, and what the conditions would be for changing it.” The rise in cost comes as no surprise to analysts, as the consortium is headed up by one of the most inefficient pipeline builders in the world, and the undersea route is estimated to already cost three times that of an overland route. The consortium building Nord Stream includes consortium includes Russian gas giant Gazprom, Germany’s BASF/Wintershall and EON Ruhrgas and Dutch group Gasunie. Former Chancellor of Germany Gerhard Schröder was infamously appointed as a chairman of the project right after leaving office, where he played an instrumental political role in pushing the project through. See a video news report about the story here.