Nord Stream AG, the OAO Gazprom (GAZP.RS)-led joint venture seeking to build an underwater pipeline from Russia to Germany, said Thursday it expects to complete EUR2.5 billion in financing for the second phase of the project in the fourth quarter of 2010.
Nord Stream AG, the OAO Gazprom (GAZP.RS)-led joint venture seeking to
build an underwater pipeline from
Russia
to
Germany
, said
Thursday it expects to complete EUR2.5 billion in financing for the second
phase of the project in the fourth quarter of 2010.
The pipeline consortium will start negotiations with banks on the financing
this summer, Chief Financial Officer Paul Corcoran said.
"We expect the phase two financing will be launched in the summer and
signed by the end of the year," Corcoran said.
Friday, Russian President Dmitry Medvedev will officially launch construction
of the pipeline, which is envisioned to carry 55 billion cubic meters of
Russian natural gas on the bed of the
Baltic Sea
to
European consumers, bypassing transit countries like
Ukraine
and
Belarus
.
Capital spending will total EUR7.4 billion, while total funding requirements
until the pipeline start operating--including interest on loans--will be EUR8.8
billion, Corcoran said.
Seventy percent of capital spending will be provided via external funding,
while the rest will be financed by Nord Stream AG's shareholders, which apart
from Gazprom has
Germany
's
E.ON AG (EOAN.XE), Ruhrgas and BASF/Wintershall and Dutch Gasunie as minority
shareholders.
"We have a very big interest from the banks," Corcoran said, adding
that financing for phase one was 60% oversubscribed.
Earlier this year, Nord Stream AG raised EUR3.9 billion from 26 financial
institutions and international banks for the first stage, which according to
plan will start operations next year.
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