Shell, Engie of France, Austria’s OMV and Germany’s Uniper and Wintershall have agreed to each pay €950 million to fund the Gazprom-led Nord Stream 2 pipeline project. The financing deal paves the way for the 55 Bcm/year gas interconnector that had faced strong opposition from some EU member states on competition grounds.
Nord Stream 2, the project company set up for the venture, announced that the above-mentioned five European energy companies committed to provide long-term financing for 50% of the total cost of the project, which is currently estimated to be US$10.3 billion (€9.5 billion). Each European company will fund up to $1 million (€950 million).”
Gazprom will remain the sole shareholder of the project company and will come up with the remaining 50% of funding.
With a capacity of 55 Bcm/year, Nord Stream 2 will bring Russian gas over a distance of 1220 kilometers from the Russian coast via the Baltic Sea to Greifswald in northeast Germany.
Construction is scheduled to start in 2018 and is due for completion by the end of 2019.
Nord Stream 2, the project company, said it welcomed the “final commitment” of the European Union for the project, suggesting the backing from Brussels underscored the strategic importance of the Baltic Sea pipeline link for the European gas market amid declining domestic production.
The offshore pipelay company Allseas has been contracted to work on both Nord Stream lines to start in 2018 and 2019, respectively. Three pipelay vessels will be used for that purpose – the mega vessel Pioneering Spirit, Solitaire and Audacia.