* Denmark approves Nord Stream 2 pipe in Danish waters
* Pipeline has divided the EU and drawn U.S. anger
* Ukraine-Russia gas transit deal ending soon
* Nord Stream says project to be completed "in the coming
months"
(Adds comments by U.S. Department of Energy and deputy
secretary of state)
By Stine Jacobsen and Vladimir Soldatkin
COPENHAGEN/BUDAPEST, Oct 30 (Reuters) - Denmark on Wednesday
gave the go-ahead to the Nord Stream 2 gas pipeline, removing
the last major hurdle to completion of the Russian-led project
that has divided opinion in the European Union.
The Danish permit was the last needed for the 1,230-km-long
(765-mile) pipeline from Russia to Germany. The United States
and several eastern European, Nordic and Baltic countries have
expressed concern that the project, led by state-owned Gazprom
, will increase Europe's reliance on Russian gas.
A U.S. Energy Department official said the project increases
Russia's grip over regional energy supply and threatens the
security of European allies. "The United States will ... examine
all tools at its disposal regarding this project," the official
said on condition anonymity, though it was unclear whether tools
such as sanctions could stop it.
U.S. President Donald Trump, like his predecessor former
President Barack Obama has opposed the project. The United
States is offering exports of liquefied natural gas, or LNG, to
Europe to lessen its dependence on Russian gas.
Russian President Vladimir Putin, speaking in Budapest, said
it was in Europe's interests to finish the project.
"We welcome this decision," Putin said at a news conference
after meeting Hungary's Prime Minister Viktor Orban.
"Denmark has proved itself as a responsible participant of
the international communication, defending its interests and its
sovereignty, (as well as) interests of its main partners in
Europe that are interested in diversification of deliveries of
Russian hydrocarbons.
According to its initial schedule, Nord Stream 2 should have
been operational by the end of this year when an agreement on
the transit of Russian gas via Ukraine, the main route for
exports to Europe, expires.
The EU has urged Moscow and Kiev to reach a new agreement
before Dec. 31 but there are a number of obstacles including a
political row between Kiev and Moscow, a pro-Russian insurgency
in eastern Ukraine, and litigation between Russian gas supplier
Gazprom and Ukraine energy company Naftogaz.
Germany has also said that Nord Stream 2 would only be
launched if Gazprom also continued to transit gas through
Ukraine.
NO TIMELINE
A spokesman said the Nord Stream 2 consortium, which
includes Germany's Uniper and Wintershall DEA,
Anglo-Dutch Shell, Austria's OMV and France's
Engie, would work to complete the project "in the
coming months," but declined to specify a timeline.
More than 87% of Nord Stream 2 has been built but
applications with Danish authorities to lay pipes under Danish
waters have been pending since April 2017.
"We are pleased to have obtained Denmark's consent to
construct the Nord Stream 2 Pipeline through the Danish
continental shelf area," said Samira Kiefer Andersson, Nord
Stream 2's permitting manager in Denmark, in a statement.
She said that preparatory work and the subsequent pipelay
would start in coming weeks, but it was not immediately clear
how long it would take to complete the stretch.
The Danish Energy Agency said in a statement that it had
granted a permit to Nord Stream 2 to construct a 147-km section
of the twin pipeline southeast of the Danish island Bornholm in
the Baltic Sea.
Nord Stream 2 will have to wait another month before the
permit can be used, according to Danish law which gives parties
the option to lodge complaints for up to four weeks after the
decision, the DEA said.
At a joint news conference with Putin, Orban said Hungary
was interested in joining the TurkStream gas pipeline, running
from Turkey via Bulgaria to Serbia and Hungary, next year.
"TurkStream is a preference (for us); the sooner we can join
the better," Orban said.
TurkStream would open up an additional gas delivery route to
Hungary, which is also reliant on Russian gas shipments via
Ukraine.
A U.S. bill to slap sanctions on companies involved in
building the project passed a Senate committee in July but has
yet to reach the full chamber.
John Sullivan, a deputy secretary of state and Trump's
nominee to be U.S. ambassador to Russia, told his nomination
hearing on Wednesday that sanctions may impose a substantial
cost on Russia, but not stop the pipeline.
"My concern is we may already have reached the point where
the Russians will have the resources and ability to complete the
pipeline no matter what we do," he said.
(Additional reporting by Krisztina Than in Budapest and Timothy
Gardner and Patricia Zengerle in Washington, writing by Stine
Jacobsen and Andrey Ostroukh, editing by Deepa Babington,
Kirsten Donovan and Richard Chang)
