Denmark O.K.'s Nord Stream Baltic Gas Pipe

Denmark moved on Tuesday to provide Russian gas giant Gazprom (GAZP.RTS) with the go-ahead to lay a controversial pipeline through Danish waters in the Baltic Sea. The approval came after several months of heavy diplomatic activity between Denmark and Russia, including a personal phone call from the Russian Prime Minister Vladimir Putin to Prime Minister Lars Lokke Rasmussen.

"We have given our approval after evaluating all the environmental problems. We have found the project to be fully safe," said Energy Agency engineer Kirsten Lundt Eriksen.

The Nord Stream project—which is to transport gas from Vyborg in Russia to Greifswald on the German coast—has been strongly opposed by several Eastern and Central European countries, but now seems closer than ever to reality.

Nord Stream will enable Russia to cut off gas to its eastern neighbours while maintaining supplies to Western Europe. Disagreements with Ukraine in particular have given rise to temporary cut-offs in supplies in recent years.

'Yesterday It Was Tanks, Today It's Oil and Gas'

Critics of the pipeline say that Russia will use its gas pipeline in the Baltic for strategic reasons.

"Yesterday it was tanks, today it's oil and gas," Zbigniew Siemiatkowski, the former head of Poland's security service told the New York Times, which also reported that the Russian premier put pressure on the government in Copenhagen to approve the project in a recent telephone call to the Danish prime minister.

The prime minister's office has confirmed that Lokke Rasmussen recently received a telephone call from Putin, but declined to say what the conversation was about. Lokke Rasmussen is due to go to Russia on an official visit in November, while the Russian president is due on a reciprocal visit next year.

Danish approval comes as Denmark's largest energy provider, DONG Energy, has decided to double an already announced contract for gas supplies from Gazprom, which will be supplying an annual 2 billion cubic meters of gas to Denmark by 2012 at the latest.

'This Is not about Dependency on Russia'

DONG Energy, however, denied allegations by critics that Denmark would become dependent on Russian gas.

"This is not about dependency on Russia, but on not being dependent on only one source. We are currently 100 percent dependent on North Sea gas. We are thinking about the security of supply to Denmark and Sweden, both of whom currently get all their supplies from Denmark," said DONG Spokesman Ulrik Frohlke.

Sweden is also currently deciding whether to approve Nord Stream, which has caused a major debate in Stockholm. Russia originally proposed establishing a manned platform in Swedish waters, but that element has since been dropped and Sweden appears to be close to approval.

A deadline had been set for Tuesday for protests against the pipeline, after which point the Swedish government will address complaints and decide on its position.

Danish authorities have said that they do not have security issues with the pipeline as long as Russia asks permission before inspecting its pipeline in Danish waters.

But Copenhagen University security expert and Assistant Professor Peter Viggo Jacobsen said the pipeline is, without a doubt, part of Russia's geo-political policy. "Russia is doing what it can to be able to run as many pipelines as possible and deliver gas to Europe in order to be able to put pressure on us," Jacobsen said.

"(The supplies) can be used as pressure when parties disagree and the gas can be stopped. But apart from that Russia also has an interest in earning more money. So there is both a commercial and geo-political interest. It's a good card to have if you want to get something from the European Union," Jakobsen said.

According to Gazprom—which currently covers 28 percent of the EU's gas needs—Nord Stream is purely a commercial, energy strategic endeavor and has nothing to do with politics.

Nord Stream Director Matthias Warnig of Germany told the New York Times that fears in Eastern Europe are unfounded and that Europe needs Russian gas.

"The Wall was brought down 20 years ago," Warnig said.

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