Putin visits Finland to push for Nord Stream, talk timber tariffs

MOSCOW, June 3 (RIA Novosti) - Russia's prime minister will visit Finland on Wednesday to push for Finland's approval for the Nord Stream pipeline to bring Russian natural gas to Europe under the Baltic Sea.

Russia's timber tariffs, a thorny issue in relations with Finland, will also be on the agenda of Vladimir Putin's one-day trip to Finland, a Russian government official said ahead of the visit.

"Practical issues to promote the project to build the Nord Stream gas pipeline, which is designed to improve Europe's energy security, will be discussed at the talks," the spokesman said.

The construction of the 6 billion-euro pipeline, due to eventually pump 55 billion cu m of gas year to Western Europe bypassing traditional transit nations, has been repeatedly delayed over Baltic nations' environmental and security concerns.

Sweden has said Russia could use the pipeline for spying, while the project's most vocal critic has been Poland, which transits some 30 billion cubic meters of Russian gas to Germany each year.

President Tarja Halonen said in April that Finland's concerns about the project were purely environmental and said she hoped they would be tackled by June. She said "we will know more about the timeframe" for the project by her meeting with Putin.

Russia provides 100% of Finland's gas requirements, and some 70% of its crude oil supplies.

An environmental impact assessment is expected to be completed in late 2009, and the pipeline's first leg of some 1,200 km, with an annual capacity of 27.5 billion cu m of gas, is planned to be put into operation in 2010.

Putin will meet with Halonen, Prime Minister Matti Vanhanen and members of the Russian and Finnish business communities.

Timber tariffs have become a bone of contention between Finland and Russia, which plans another increase in its export duties to 80% of the value of the wood declared at customs starting from 2010. Finland has objected to the tariff hikes, which have affected its wood-processing industry, forcing companies to close production lines and cut jobs.

The Russian government delayed the move, designed to encourage domestic processing industry, for a year last December, heeding Finland's request.

"The Russian government plans to pursue strategic plans to develop domestic timber processing industry, including by encouraging Finnish investment," the government spokesman said.

Finland is Russia's fifth-largest EU trade partner, and Russia became Finland's main partner last year, when bilateral trade grew to $22.4 billion against $15.7 billion in 2007.

The global financial crisis, however, has had an impact on the countries' economic ties, with trade turnover declining 44% in January-March 2009 year-on-year, the Russian government said.