Nord Stream: Ensuring Compliance with International HSE Standards and Managing Contractor HSE Performance

Abstract

Abstract The Nord Stream Project ("the Project") comprises two 48" sub-sea pipelines (the longest in the world so far) and landfalls in Russia and Germany, and is currently Europe's largest infrastructure project. The 1 224 km long offshore pipelines will together carry 55 billion cubic metres (bcm) of natural gas each year through the Baltic Sea, supplying European consumers with Russian gas. Nord Stream recently entered operation with commissioning of the first pipeline and the second pipeline is scheduled to become operational in late 2012. The Project is debt financed to the tune of EUR 6.4 billion and is subject to international as well as national standards and guidelines, including the Equator Principles and the OECD Common Approaches on the Environment and Officially Supported Export Credits. In practice, this has meant compliance with international environmental and social benchmarks, including the Performance Standards of the International Finance Corporation (IFC), a member of the World Bank Group. Nord Stream, assisted by its consultant ENVIRON, has developed and is implementing a construction phase Environmental and Social Management System (ESMS), which draws on national ESIAs and construction permits issued in Russia, Finland, Sweden, Denmark, and Germany and a trans-boundary (Espoo) report, which assessed potential trans-boundary impacts on the five transit countries as well as Estonia, Latvia, Lithuania, and Poland. The core of the Nord Stream ESMS comprises 18 discrete construction management plans (CMPs) which document key mitigation, monitoring, and other Project obligations covering a wide range of topics, including conventional and chemical munitions (dumped in the Baltic Sea), marine pollution prevention, biodiversity, hydrotesting, emergency preparedness, cultural resources, waste management, stakeholder engagement and working conditions for construction personnel. To maintain close surveillance of contractor performance and ensure compliance with Project commitments, Nord Stream has to date conducted more than 40 HSES audits and inspections in the field and tracked over 250 Opportunities For Improvement. Key lessons learned include: the need to maintain a coherent HSES Commitments Register during the ESIA phase and a robust Project change management process; early and ongoing engagement with contractors; and rigorous follow-up of audit findings.