Russian state-owned gas monopoly Gazprom has reportedly revealed that the projected costs for the Nord Stream offshore pipeline now stands at E6 billion, a E1 billion increase over the previous E5 billion estimate, according to Platts.

Nord Stream, the planned 1,200km natural gas pipeline that will run from Russia to Germany across the bed of the Baltic Sea, is due to commence operations in 2011. It is the cost of this offshore pipeline that has been increased to E6 billion.

However, according to, including the onshore section of the project, the total cost of the project is estimated to be approximately E12 billion.

Gazprom is building a 917km pipeline onshore in Russia that will connect Nord Stream to the Russian gas transmission system. In Germany, there will be two onshore connections that will run from Greifswald to the south and west of the country. Wingas and E.ON Ruhrgas are constructing these pipelines, with a total length of 850km, reported.

Platts cited Jens Mueller, the Nord Stream spokesman, as saying that the project’s costs depend heavily on the global development of steel prices. The publication also cited Mr Mueller as giving an update on the project, commenting that tenders for the pipeline tubes and the tube laying machines are expected to be closed by the end of 2007.