Interview: Paul Corcoran, CFO, Nord Stream 2

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Paul Corcoran, CFO, Nord Stream 2
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In this exclusive interview, Paul Corcoran, CFO at Nord Stream 2 discusses the impact of Nord Stream 2 on Europe’s energy system, the current position of NS2 partners and the future of the European gas industry.

Gastech News: Following the success of Nord Stream 1, what will be the potential impact of Nord Stream 2 on Europe’s energy system?

Paul Corcoran: Nord Stream 2 is a new pipeline to supply additional gas imports to the EU through the Baltic Sea to compensate for decreasing domestic gas production and fill a part of the growing demand for imported gas – improving the supply security for Europe.

Gastech News: What are the most important facts about Nord Stream 2? And how is the project moving forward?

Paul Corcoran: The Nord Stream 2 project is on track. In March 2016, Nord Stream 2 placed a binding order of approximately 2,500 km of large-diameter pipes for the construction of the pipeline. The concrete weight coating and logistics contract were signed on 6 September 2016. The first pipes were delivered from pipe mills to concrete coating plants in Finland at the end of September. The pipe-lay tender award is also expected until the end of 2016. We submitted the first permit application for the pipeline to the Swedish government in September 2016 with the applications in four other countries (DE, DK, FI, RU) to be submitted in early 2017. The start of pipe laying is planned for Q1 2018, followed by the start of operation at the end of 2019.

Gastech News: There has been some uncertainty recently regarding partners’ commitment to the Nord Stream 2 project. Can you clarify the current position of NS2 partners and what role cooperation plays in implementing such a complex project?

Paul Corcoran: Gazprom and Western interested parties are continuing their close cooperation and mutual efforts towards strengthening the security of the European gas supply.

Gastech News: How might Nord Stream 2 help natural gas to open new markets within Europe and position gas as “the fuel of choice” replacing more traditional sources?

Paul Corcoran: Together with other suppliers and transport options (such as LNG), gas from Nord Stream 2 will ensure a competitive supply. The EU industry, in particular, needs reasonably priced energy if it is not to relocate production to other regions.

Nord Stream 2 as part of an economically sound reinforcement of Europe’s gas market will also enable climate-friendly energy transition under sensible economic conditions. For example, the 55 bcm gas that Nord Stream 2 will have the capacity to transport could save about 160 million tonnes – or 14% of total EU CO2 emissions from power generation – if the gas were to be used instead of coal.

Gastech News: What are your predictions for the European gas industry in the next 5 years?

Paul Corcoran: We will certainly see the result of the build-up of LNG export capacities in the last years, with a more liquid market. This is widely expected by experts. But with the low prices, there is not enough capacity build-up in the producing markets to follow this “wave” of new LNG capacity – and sooner rather than later, at the beginning of the next decade, the growing Asian demand will have absorbed the new production and the market will likely be tight again. That is when the European consumers and industry need to be able to bank on sufficient, additional pipeline capacity connecting to the only supplier who can actually deliver in short and medium term, the required volumes – Russia. So sooner rather than later, Nord Stream 2 needs to be built, as an important pillar of securing the European supply.

Gastech News: What are you most looking forward to about the EAGC conference in The Hague in November 2016?

Paul Corcoran: The EAGC is an immensely informative and influential forum for all discussions around our industry. As we are well into the main stage of our project development, with pipes already being delivered, major investment contracts signed and further permit applications being submitted in the near future – The EAGC will be a great opportunity to give an update on our progress and discuss the really important topics for our industry, beyond what are sometimes misleading headlines.

Paul Corcoran will participate in a panel discussion “Talking Heads: New Markets – New Supplies” at the European Autumn Gas Conference, 14-16 November. Programme details can be found here.

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Photo: Production of Nord Stream 2 pipes by Chelpipe, Chelyabinsk/Russia, in September 2016