3 firms get Steel pipe Nord Stream 2 contract

The consortium of companies planning to build the Nord Stream 2 sub-sea pipeline to bring Russian gas to Europe said on Friday it has awarded steel pipe delivery contracts for 2,500 km (1,550 miles) to three firms, completing a tender.

The steel pipes with a total weight of 2.2 million tonnes will be supplied by Europipe GmbH, a joint venture between German steelmakers Salzgitter and Dillinger Huette, with 40 percent of the contract, and Russian companies OMK (33 percent) and Chelpipe (27 percent).

Contracts are still being negotiated and are due to be signed within the next few weeks, the Zug-Based consortium said in a statement.

Construction is due to start in 2018 and first shipments of the pipes are earmarked for September 2016, it said.

Austrian steelmaker Voestalpine will soon start talks with OMK about its share of the contract, a spokesman said, adding that the two companies had jointly supplied Nord Stream before.

A spokesman for the Nord Stream 2 consortium said the precise value of the pipe contracts could not yet be specified but it would be below the 2.6 billion euros ($2.9 billion) cost of the pipes for the existing Nord Stream 1.

He said the total cost of Nord Stream 2 was currently estimated at 8 billion euros.

Gazprom-led Nord Stream 2, due to open in 2019, should double the amount of gas directly shipped from Russia to Germany, cutting out traditional transit route via Ukraine.

Since its conception last year, the project has prompted some European governments to complain it increases the reliance on shipments from Russia, benefitting Germany but undermining unity in the EU on energy issues.

Companies in the group of Nord Stream 2 partners - E.ON , BASF/Wintershall, Royal Dutch Shell (RYDAF) , OMV and Engie say the plan will mitigate declining European gas production and the risk of supply disruption from the conflict in Ukraine.

Shares in Salzgitter were up 7.7 percent at 1610 GMT outperforming 3.2 percent gains in the DAX blue-chip index.

($1 = 0.8960 euros)

(Reporting by Vera Eckert; Additional reporting by Francois Murphy in Vienna; Editing by Ludwig Burger and Ruth Pitchford)