Russian energy company Gazprom will have to pay all the expenses for the construction of the pipeline “Nord stream-2”, as the Austrian company OMV and other European partners refused to participate in the financing of the project. It is reported by German publication Der Standard.
As the newspaper notes, now “Gazprom” will have to spend on the implementation of the “Nord stream-2” twice — up to 1 billion 750 million dollars. And since the costs cannot be covered by cash flow, leverage increases significantly.
“Gazprom” was going to implement the project “Northern stream-2” together with the European Engie, OMV, Shell and Wintershall Uniper, retaining 50%+1 share. However, after the Polish anti-monopoly regulator vetoed this Union, they refused to participate in the project and the original scheme could not be implemented.
As the newspaper notes, the increase of the “North stream 2” may worsen the already difficult situation in which the “Gazprom”.
The project “Northern stream-2” involves the construction of two pipelines with a total capacity of 55 billion cubic meters of gas off the coast of Russia through the Baltic sea to Germany. The new pipeline is planned to be build next to the “Nord stream”.
Map: Gazprom
As was stated by the Chairman of the Board “Gazprom” Alexander Medvedev, the capital cost of the “Nord stream-2” is expected at 8 billion euros, however, together with the cost of borrowing the amount can reach 9.9 billion euros, and reported that the company expects to sign the agreements on financing the “Nord stream-2” to the end of the year.
