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Nord Stream 2 financing model to be ready by year end - OMV

February 24, 13:44 UTC+3

"We must do it this year, and next year construction should begin," CEO of Austrian OMV Rainer Seele told TASS

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CEO of Austrian OMV Rainer Seele

CEO of Austrian OMV Rainer Seele

© EPA/CHRISTIAN BRUNA

BERLIN, February 24. /TASS/. Companies, participating in construction of the Nord Stream 2 gas pipeline will decide on the financing model before the year ends, CEO of Austrian OMV Rainer Seele told TASS on Friday.

"We must do it this year, and next year construction should begin," he said. "We are in the phase of agreeing with the European partners, so that to think over the steps and not to allow facing a situation, where we would have to revoke our agreements again."

"Every participant has a preferred model," he continued. "We should agree a common model, which is supported by the five potential European partners and Gazprom - but we do not have one as yet."

About the project

The Nord Stream 2 natural gas pipeline is expected to come into service at the end of 2019. The pipeline is set to run from the Russian coast along the Baltic Sea bed to the German shore. Each of the pipeline’s two stretches will have annual capacity of 27.5 billion cubic meters. Capital expenditures on the project are estimated at 8 billion euros and its total cost will amount to 9.9 billion euros, taking into account project financing.

In January, Gazprom announced the plan to include Nord Stream in its 2017 investment program and inject 110.7 billion rubles ($1.9 billion) in the project.

On February 3, 2017, Gazprom approved the acquisition of 50% of shares in Nord Stream 2 AG, which enabled the company to record 100% of Nord Stream 2 AG as treasury stock. The Swiss-based Nord Stream 2 AG was set up for the design, construction and further exploitation of the Nord Stream 2 natural gas pipeline. The company was 100% owned by the Netherlands-based Gazprom subsidiary, Gazprom Gerosgaz Holdings B.V.

Gazprom and its European partners, Shell, OMV, Engie, Uniper and Wintershall, applied to German and Polish antimonopoly regulators earlier on setting up a joint venture for the implementation of the Nord Stream 2 project. Germany approved the decision while the Polish regulator raised objections, saying that such a JV would restrain competition. Later the companies recalled the application to the Polish regulator.

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