Iran Energy News Oil, Gas, Petrochemical and Energy Field Specialized Channel
Related Articles
Russia`s Gazprom and five European energy companies are committed to fully financing Russia`s 55 Bcm year Nord Stream 2 natural gas link to Germany if no external financing is raised. the project company`s Chief Financial Officer Paul Corcoran said Friday.
As of September 2018. Gazprom provided over Eur2.6 billion ($3 billion) in equity and loans. The five European financial investors [Engie. OMV. Shell. Uniper and Wintershall] matched this with over Eur2.6 billion of their own loans.` Corcoran told S&.P Global Platts in an interview.
This Eur5.2 billion already committed is around 55% of the estimated Eur9.5 billion ($11 billion) total cost. including financing.
A US law adopted last year gave the US president discretionary powers to impose sanctions on companies investing in Russian energy export pipelines. such as Nord Stream 2. from August 2. 2017. creating uncertainty about the project`s attractiveness to new investors.
The Nord Stream 2 project company had intended to go to the market for external financing for up to 70% of the total cost this year. in a bid to optimize financing as much as possible.
It now plans to do so `probably in the first half of 2019.` Corcoran said.
The commitment by Engie. OMV. Shell. Uniper and Wintershall to pay for up to half of the total cost is not affected by the US law. as the financing agreement was signed in April 2017. before the law applied. he said.
Gazprom has committed to fund the other 50%. `so we are funded [with or without new investors].` Corcoran said. ROUTE CHANGE MANAGEABLE
Nord Stream 2 would face some extra costs if it has to change its route through the Danish waters of the Baltic Sea to get planning approval. but these would be `manageable and limited.` Corcoran said.
The company has applied for permits for both an `optimal` route. which under a recent change in Danish law would include an assessment by Denmark`s foreign affairs ministry. and an alternative. which would not.
It already has planning permits from the four other countries along the route — Finland. Germany. Russia and Sweden — and started laying pipes in Finland earlier this month.
Corcoran said even if the Danish permit is not granted until the middle of next year. for either route. the project could still be completed by end-2019 as originally planned.
`We have planned the pipe lay accordingly and the Danish section will be installed in in the second half of 2019. Construction of the Danish section is expected to take around two months.` he said.
Gazprom wants to have Nord Stream 2 flowing gas before its transit agreement with Ukraine expires at the end of 2019.
