Nord Stream completes $5.4B financing, to start pipeline construction in April

Source: Nord Stream

Nord Stream together with its shareholders in the consortium, Gazprom, BASF/Wintershall Holding GmbH, E.ON Ruhrgas AG and N.V. Nederlandse Gasunie today announced the successful signing of Phase I financing of the pipeline project. The financing for Phase I amounts to US $5.4 billion (3.9 billion euros) and paves the way for construction of the first line of Nord Stream to start as scheduled in April 2010.

Financing for the project comes from Nord Stream’s shareholders who are providing investment totaling 30 percent of the total project cost pro rata to their holding in the company (Gazprom 51 percent, BASF/Wintershall Holding GmbH, 20 percent, E.ON Ruhrgas AG 20 percent and N.V. Nederlandse Gasunie 9 percent) with 70 percent project financing from the bank market.

Twenty-six banks are participating in the deal underlining the attractiveness of the project during difficult market conditions. The ECAs providing cover for the deal are HERMES and SACE with support also coming from Germany’s untied loan guarantee scheme: the amount covered by such agencies totals approximately 3.1 billion euros. Additionally, there will be a syndicated loan facility on an uncovered basis in an amount of up to 800 million euros. Nord Stream will be approaching the financial markets for the financing of Phase II in 2010.

Alexei Miller, Management Committee Chairman of Gazprom said: “The completion of Phase I financing is a landmark event in the development of Nord Stream and helps take the project from concept to reality. Nord Stream solidifies the long-standing energy relationship between Russia and Europe, a relationship that has lasted nearly forty years. Gazprom is delighted to be part of a venture that will provide reliable supplies of Russian energy to Europe for many decades to come.”

The pipelaying of the first line of Nord Stream will start in April 2010 with the Castoro Sei pipelay vessel operating from this date. The Solitaire pipelay vessel will begin to lay pipe on the same line in September 2010. It is planned that construction of the first line will be completed in 2011 with construction on the second parallel line scheduled to begin in 2011 and finishing in 2012.

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