Nord Stream, the Gazprom-led venture building a gas pipeline from Russia to Germany, raised 3.9 billion euros ($5.3 billion) for the project from 26 banks.
Gazprom and its partners, BASF’s Wintershall unit, E.On Ruhrgas and Nederlandse Gasunie, plan to ship gas directly across the Baltic Sea to Europe, bypassing transit countries such as Ukraine. The Nord Stream link, which will pass through Russian, Finnish, Swedish, Danish and German territorial waters, received its final approval from Finland in February.
“We’ve closed the substantial financing in probably the worst market conditions since the Great Depression,” finance director Paul Corcoran said in London. Banks pledged 60 percent more loans than the company sought, he said.
Loans will pay for 70 percent of the project and shareholders will contribute the remaining 30 percent, according to a company statement. Nord Stream will seek 2.5 billion euros in additional funds later this year, Corcoran said. ?
Nord Stream received guarantees on 3.1 billion euros of the debt from Italy’s export credit agency SACE, a German government loan guarantee program and Euler Hermes, the world’s largest trade-credit insurer based in Paris.
The insured portions of the loan will mature in 16 years, and 800 million euros of loans without insurance are due in 2020, Corcoran said.
Almost 50 percent of the pipeline’s capacity has been reserved, Matthias Warnig, managing director of Nord Stream, said at the press conference.
Demand for gas may not fill Nord Stream’s full capacity of 55 billion cubic meters by 2012, said Marcel Kramer, chief executive of Dutch state gas network operator Nederlandse Gasunie, with a 9 percent stake in Nord Stream. “The market can’t grow that fast,” Kramer said.
The first line is scheduled to start in April 2011 and to deliver 27.5 billion cubic meters a year to a terminal near Greifswald, Germany. A second line is slated for a year later.
Gazprom holds a 51 percent stake in Nord Stream. BASF’s Wintershall unit has 20 percent, and E.On Ruhrgas has 20 percent. GDF Suez will take a 9 percent stake in Nord Stream by the start of construction, Gazprom said this month.
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