insists the Nord Stream 2 gas pipeline will save money and cut carbon emissions as it defended the project against accusations it was politically motivated.

The controversial pipeline was a “highly efficient, commercial project”, Alexei Miller, chief executive of the state-controlled Russian gas giant, said in a speech at the St Petersburg International Economic Forum, Russia’s version of Davos.

The $11bn Nord Stream 2 project, unveiled last year by and five European energy companies, would expand a connection between Russia and Germany across the Baltic Sea. This would come at the expense of piping gas through Ukraine and eastern Europe.

Gazprom has encountered stiff political resistance among central and eastern European countries, which argue it is a geopolitical project that will increase the region’s dependence on Russian gas and hurt the economies of countries such as Ukraine and Slovakia that earn transit fees.

The energy company is also trying to protect its market share in Europe amid attempts by to reduce dependence on Russian gas and the prospect of heightened competition from US shale gas in the form of liquefied natural gas.

Mr Miller said Nord Stream 2 would ensure that Gazprom remained the most competitive supplier to the continent, with costs half those of US LNG or pipeline gas from Azerbaijan. He predicted that Gazprom, which meets just under a third of Europe’s gas demand, would export a record quantity to the continent this year and that its market share would continue to grow.

“We know about alternative sources [of gas] and other projects, but we understand very well that Russian gas will be needed on the European market for a very long time,” he said.

Mr Miller said that transit through Ukraine would fall from 67bn cubic metres last year to 10-15bn cu m per year after 2020, when Gazprom’s contract with Ukraine expired and Nord Stream 2 was set to start operations.

However, he rejected suggestions the project had been motivated by deteriorating relations between Russia and Ukraine, presenting commercial and environmental justifications for the pipeline.

Pointing to falling domestic gas production in the UK, Norway and the Netherlands, Mr Miller said the focus of demand for Gazprom’s gas was increasingly in northern Europe. At the same time, Gazprom’s supply base is also moving further north as the company plans to tap fields in the Yamal Peninsula, meaning that gas delivered to Germany via the Nord Stream 2 route would travel 4,166km compared with 6,051km via Ukraine.

“Nord Stream 2 . . . is the shortest export route from Yamal to the consumer markets,” he said, claiming that the shorter distance and lower transit fees meant the pipeline would save Gazprom at least $45bn over 25 years.

Mr Miller argued that supplying gas to Europe via Nord Stream 2 would reduce carbon emissions by 8.9m tonnes of carbon dioxide equivalent per year compared with transit through Ukraine, thanks to the planned pipeline’s modern engineering and shorter distance.