The Nord Stream 2 project, being pursued by Gazprom, has taken another important step towards its implementation, responding to the need of the European Union for additional gas imports and thereby improving security of supplies to Europe.
Nord Stream 2 AG signed financing agreements for the Nord Stream 2 pipeline project with ENGIE, OMV, Shell, Uniper and Wintershall. These five European energy companies have committed to provide long-term financing for 50% of the total cost of the project, which is currently estimated to be €9.5 billion (US$10.4 billion). Each European company will fund up to €950 million (US$1.04 billion). Gazprom is and will remain the sole shareholder of the project company, Nord Stream 2 AG.
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.
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 reliable Russian gas reserves and European gas consumers from the coast of Russia via the Baltic Sea to Greifswald, Germany. Construction work will begin in 2018 and will be completed by the end of 2019.
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 need and supply 26 million European households. This secure supply of natural gas with its low CO2 emissions will also contribute to Europe’s objective to have a more climate-friendly energy mix with gas substituting for coal in power generation and providing back-up for intermittent renewable sources of energy such as wind and solar power. Nord Stream 2 will largely follow the route and design of the successful Nord Stream pipeline.