Published: December 1, 2010
Senior debt sought to complete historic gas line.
A consortium of energy companies has received a good response in its search for senior debt to finance the second phase of the Nord Stream Pipeline project, which will supply gas directly from Russia to the EU.
Nord Stream expects the second phase of the project to cost €2.5bn, with 30% of it funded by its shareholders, comprising Gazprom, BASF/Wintershall, E.ON Ruhrgas, Gasunie and GDF Suez. The balance is to be met by senior debt.
The company reported in November that interest from banks in the project is “very high” with initial subscription levels of more than €4bn, making it some 50% oversubscribed.
“We are delighted with the level of interest shown in the project and hope to move quickly to sign letters of commitment with selected banks,” Nord Stream financial director Paul Corcoran says. “We are on course to complete this process in early December.”
The project is due to be completed in 2012 when up to 55 billion cubic meters of additional Russian gas can be sent to the market through the Baltic Sea. The first of the pipelines is due to be operational by the end of 2011.
Nord Stream’s managing director, Matthias Warnig, adds that this is a ground-breaking project. “Everything is going according to plan, and we are on budget and on schedule. The success of our project will make it a benchmark for international collaboration and meticulous planning.”