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The High Court in London has been hearing an insurance claim case involving the damaged Nordstream pipelines, brought by the pipeline’s operator, Nord Stream AG, and Lloyd’s Insurance Company and Arch Insurance. The two insurers are refusing to pay a €580 million ($684 million) claim to the operator, arguing that the pipelines were damaged as a “consequence of war,” which the insurance policy did not cover.
The court has been hearing assessments concerning the cost of repairs, suggesting that a compromise could be negotiated. An independent technical report commissioned by the court stated that repairing the Nord Stream gas pipelines would take 36 months provided funding could be secured and no delays were encountered. To do so would require the purchase of some 7 km of new pipeline from China for €16.7 million and the use of two Russian pipelaying vessels to drive down repair costs.
Nord Stream AG has challenged these findings, arguing that the vessels are now located near Vladivostok on Russia’s east coast, and relocating them to the Baltic Sea would increase the total repair bill, while the cost of purchasing Chinese equipment is likely to be higher. Nord Stream is seeking more than €400 million in damages.
There are currently no plans to reopen the Nord Stream pipelines, despite a mounting energy crisis in Europe and pressure from the right wing in Germany. Instead, the report is being used by the court to calculate a potential compensation payout to Nord Stream AG.
Nord Stream AG is based in Switzerland. It is an international association consisting of five major companies: Gazprom (Russia); Wintershall Dea and Infrastruktur Dea (Germany). The case is being heard in London as the insurance companies involved are registered there.
Both of the individual pipelines making up the Nord Stream 1 project and one of the two lines comprising Nord Stream 2 were destroyed in a series of underwater explosions off the Danish island of Bornholm on September 26, 2022. Nord Stream 1 transported Russian gas to Germany since its opening in 2011, while Nord Stream 2 was completed in 2021 but had its certification revoked by Berlin in 2022, several days before Russia’s military operation in Ukraine began.
The case continues.
