News // Transportation and storage
5 energy majors to provide financing for Nord Stream 2 pipeline
24 April 2017 , 17:32Neftegaz.RU453
Shell reported on April 24, 2017, that the company and another 4 European companies – Engie, OMV, Uniper and Wintershall – have signed financing agreements with Nord Stream 2 AG, the company responsible for the planning, construction and future operation of the Nord Stream 2 pipeline.
The 1,220-kilometer pipeline will be able to transport a total capacity of 55 billion cubic meters of natural gas a year.
It will run from the coast of Russia via the Baltic Sea to Greifswald in Germany, acting as a direct link between Russian reserves and European consumers.
According to a statement by Shell, the 5 energy companies have each committed to provide financing and guarantees for up to 10% of the total cost of the project, which is currently estimated to be €9.5 billion ($10.3 billion).
Shell said that each company will provide a long-term funding facility of €285 million ($309.8 mln) expected to be drawn down in 2017.
In addition, funds of up to €665 million will be provided to cover a combination of short and long-term funding and guarantees.
The drawdown of the €665 million fund will depend on future decisions by Nord Stream 2 AG in respect of the overall financing of the project. Gazprom remains the sole shareholder of Nord Stream 2 AG.
Nord Stream AG said today that the financial commitment by the European companies underscores the Nord Stream 2 project’s strategic importance for the European gas market, contributing to competitiveness as well as medium and long-term energy security especially against the background of expected declining European production.
Construction work will begin in 2018 and will be completed by the end of 2019.
To read this news in Russian.
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