Nord Stream AG says construction of the Nord Stream Pipeline continues on track.
The Nord Stream pipeline project involves two parallel pipelines approximately 1,220-km long that will link Russia and the European Union through the Baltic Sea, providing a transport capacity of some 27.5 bcm/y.
Construction of the first gas pipe line was completed in April 2011 with plans to start gas transportation by year–end.
Nord Stream AG, together with its shareholders in the consortium, OAO Gazprom, E.ON Ruhrgas AG, BASF SE/Wintershall Holding GmbH, N.V. Nederlandse Gasunie, and GDF SUEZ S.A. announced the successful signing of phase two financing of the pipeline project earlier this year. The project financing for phase two amounts to 2.5 billion euros.
This financing comes partly from Nord Stream’s shareholders who are providing investment totaling 30% of the total project cost pro rata to their holding in the company with 70% external project financing from the bank market. OAO Gazprom holds 51%, E.ON Ruhrgas AG 15.5%, BASF SE/Wintershall Holding GmbH 15.5%, N.V. and Nederlandse Gasunie and GDF SUEZ S.A. each hold 9%.
Twenty-four banks are participating in a deal that was oversubscribed by 60% and that mirrors the successful financial structure of Phase I financing in early 2010.
With the financing complete, Nord Stream AG plans to begin construction of the second phase of the Nord Stream pipeline next month.
Matthias Warnig, Managing Director of Nord Stream AG, said: “The completion of phase two financing marks a major milestone in the project’s evolution. With construction of Line 1 of Nord Stream basically complete and with construction of Line 2 due to start in May, it is clear that lenders see Nord Stream as a solid project with a sound economic background. Nord Stream is on track to deliver gas to Europe beginning later this year.”