Gazprom said its Nord Stream 2 project took an important step toward construction this week when the company signed financing agreements with ENGIE, OMV, Shell, Uniper and Wintershall.
The five European energy companies committed to long-term financing for 50% of the project’s total cost, currently estimated at $10.3 billion (€9.5 billion), with each contributing up to $1.03 billion (€950 million). Gazprom will remain the sole shareholder of the project company.
The commitment underscores the 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.
The 760-mile (1,220-km) Nord Stream 2 pipeline, with a total capacity of 55 Bcm annually, will provide a direct link between Russian gas reserves and European gas consumers from the coast of Russia via the Baltic Sea to Greifswald, Germany. Construction work is scheduled to begin in 2018 and be completed by the end of 2019.
Separately, Wintershall said construction of the Eugal gas pipeline, which will receive gas from Nord Stream 2 in Germany, will be launched at the end of the second quarter of 2018.
Orders for raw materials for the Eugal pipeline have been awarded and selection of a construction contractor is underway, according to Gazprom’s corporate magazine.
The 485-mile Eugal pipeline will receive gas from Nord Stream 2 and run from the Baltic sea on the route from Mecklenburg to Western Pomerania and Brandenburg to the south of Saxony in Germany, and from there to the Czech Republic.