Energinet has revised the budget for the Danish part of the Baltic Pipe. The project will thus be almost one billion kroner more expensive. There are several reasons for the large increase in the cost of the project, Energinet informs.
The largest item is due to the partial stoppage of construction work after the Environmental and Food Complaints Board rejected the Danish Environmental Protection Agency's permit for the project at the end of May. The stoppage results in a cost increase of approximately 600 million kroner.
In addition, design changes to the landfall from the North Sea and integration at the existing Nybro terminal have resulted in more costs than expected, just as high demand for contractor services has also contributed to driving up the total price of the project, explains Energinet's Director of International Relations.
- We have had to revise the budget because a number of unforeseen expenses have arisen, not least in connection with the environmental permit, where the temporary stoppage of construction results in a lot of extra costs for the contractors, who were already in full swing, he says.
The budget has been increased previously
The construction costs for the Baltic Pipe will increase to 8.2 billion DKK with the revised budget. The budget is adjusted continuously to reflect changes in costs as the project progresses. Energinet has previously increased the budget, in 2020, by almost 600 million DKK. DKK. This happened after the majority of the tenders for the project had been completed, and the costs for the construction work were greater than expected.
However, it is not certain that the budget change will be the last, so there is still great uncertainty about the financial consequences of the temporary construction stop after Baltic Pipe's environmental permit was sent back for reconsideration.
Energinet is currently in negotiations with the contractors about renewed schedules and what costs the delay entails.
- The contractors must of course have covered the costs they are entitled to, but we have an obligation to minimize costs on the project and ensure that gas consumers do not have to pay more than is strictly necessary for the project to be temporarily halted while a new environmental permit is being prepared, says Torben Brabo.
Despite the increase in price, Danish consumers can still look forward to a savings on their tariffs of two billion. DKK, informs Thomas Bardo.
Baltic Pipe will send Norwegian gas to Denmark and primarily Poland. The pipeline helps make Poland independent of Russian gas and contributes to security of supply and CO2 reductions. Baltic Pipe will be connected in the North Sea to a Norwegian gas pipeline, and new sea pipes will also be laid in the North Sea, over parts of Jutland, under the Little Belt, over Funen and across Zealand to the Faxe area. The pipeline is expected to be ready for use in 2023.
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