Nord Stream-2 has formally withdrawn its application for the route through Danish territorial waters south of Bornholm in Denmark.

The pipeline company that plans to transport natural gas underneath the Baltic Sea from Russia to Germany said the second and third applications for routes northwest and southeast of Bornholm remain unchanged.

Katja Yafimava, a senior research fellow at the Oxford Institute for Energy Studies, told New Europe on 2 July that the decision to withdraw the first application means that neither Denmark nor Nord Stream-2 and Russian gas monopoly Gazprom wants the permitting question to be decided in the political/security sphere as it would have been the case if the Danish Foreign Ministry were to decide on the original territorial sea route.

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“No matter what the foreign ministry would have said its answer would have inevitably upset either US/Central East Europe in case of ‘yes’ or Germany/Russia in case of ‘no,’” Yafimava said, referring to the opposition of Washington and some Central and East European Union countries to the controversial pipeline.

The Oxford expert opined that now, with only two routes under considerations – neither of which requires the Danish Foreign Ministry decision – the permitting question will be back into the environmental sphere, as its impact on the environment would have to be the only consideration. “In my view, withdrawal of the original route application suggests that the prospects for Nord Stream-2 permit being granted have improved,” Yafimava said.

According to Nord Stream-2, both the second and third applications for routes northwest and southeast of Bornholm are fully within the Danish Exclusive Economic Zone (EEZ), outside of Danish territorial waters. Consequently, according to Nord Stream-2, a recommendation from the Minister for Foreign Affairs is not required and the decision on the consent to the route is only subject to an open handling process in accordance with the United Nations Convention on the Law of the Sea, known as UNCLOS, whereby the authorities must allow the laying of pipes taking into consideration the environment and ship traffic safety.

“We felt obliged to take this step because in more than two years since we filed this application, the former Danish government has not given any indication of coming to a decision,” Nord Stream 2 CEO Matthias Warnig said in a statement. “But both Nord Stream 2 and our investors need legal certainty and protection of legitimate expectations, which means a transparent and predictable decision-making process, especially against the backdrop of the advanced construction progress in the waters of the four other countries through which the pipeline stretches,” he added.

The formal notice letter was handed to the Danish Energy Agency on 28 June.

Nord Stream-2 argued the withdrawal of the original application is necessary to protect Nord Stream-2’s shareholder and the European investors from Austria, France, Germany and the Netherlands against the risk of further delays and financial losses.

Yafimava argued that given Denmark’s past rhetoric on Nord Stream-2, it would have been very difficult for the Danish Foreign Ministry politically to say ‘yes’ to the original route anyway. “Whereas the Danish Energy Agency does not really have a reason to say ‘no’ to either of the two other routes. I have no doubt that if it does say ‘no’ to them, there would be protracted litigation in which Denmark would not be in a position of strength. So I think it will say ‘yes; to one of them – presumably the one which is environmentally better,” she told New Europe.

Another question, according to Yafimava, is whether it issues the permit by early autumn thus enabling at least one string of Nord Stream-2 to be built before the transit contract for Russian gas through Ukraine to Europe expires at the end of 2019. She reiterated her belief that “delaying Nord Stream-2 would worsen – not improve – the chances of long-term Ukraine transit agreement, and that is something that Denmark might keep in mind.”