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Wintershall chief: financing model of Nord Stream-2 gas pipeline may be defined by July

March 08, 6:05 UTC+3 HOUSTON

At the same time Mario Mehren declined to give the details of the project’s possible financing

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HOUSTON, March 8. /TASS/. A financing model for the Nord Stream-2 gas pipeline may be possibly defined by the end of the first half of this year, German company Wintershall CEO Mario Mehren said.

Asked whether the model of financing for the pipeline’s construction would be possibly defined in the first half of 2017, Mehren told journalists at the energy conference CERAWeek in Houston, "I hope, it will be."

"We have reached a sound progress in our negotiations," Mehren said. "I hope we will find a solution to render not only moral support for the project, but financial as well."

Mehren declined to give the details of the project’s possible financing saying that Russian energy giant Gazprom remained the core shareholder of the project.

The Nord Stream-2 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 a capacity of 27.5 billion cubic meters. The new pipeline will double the capacity of the first stretch and will basically follow its route.

Capital expenditures on the project are estimated at €8 billion and its total cost will amount to €9.9 billion, 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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