Gazprom’s Nord Stream 2 project has taken a step towards its implementation with the signing of financial agreements for the pipeline project with Engie, OMV, Shell, Uniper and Wintershall.
The five companies have committed to provide long-term financing for 50 percent of the total cost of the project, which is currently estimated to be €9.5 billion ($10.4 billion). Each will fund up to €950 million ($1 billion). Gazprom is and will remain the sole shareholder of the project company, Nord Stream 2 AG.
Earlier this month, Nord Stream 2 AG signed a contract with Allseas for the offshore pipelay through the Baltic Sea. Allseas will use three pipelay vessels: Pioneering Spirit, Solitaire and Audacia. Solitaire was used previously to lay parts of the Nord Stream pipeline in the Gulf of Finland.
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, says Shell.
The 1,220-kilometer Nord Stream 2 gas pipeline, with a total capacity of 55 billion cubic meters a year, will provide a direct link between Russian gas reserves and European gas consumers. It will run from the coast of Russia via the Baltic Sea to Greifswald, Germany. Construction work will begin in 2018, and it will be completed by the end of 2019.
Nord Stream 2 will largely follow the route and design of the Nord Stream pipeline. With Europe’s domestic gas production projected to halve in the next 20 years, Nord Stream 2’s twin pipeline system will help Europe to meet its future gas import needs, with the capacity to transport 55 billion cubic meters of gas per year, enough to supply 26 million European households.