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News // Oil and gas worldwide

North Stream project is confirmed by the financing provided by 27 banks

15 March 2010 , 08:13Upstream3154

 

The Nord Stream gas pipeline group and banks are in the process of signing documentation for a €3.9 billion ($5.3 billion) financing, according to reports. Signing on a deal to back Nord Stream, which will pipe Siberian gas to Europe under the Baltic Sea, will complete on Tuesday, a source said to Reuters. As previously reported, the total financing will be provided by 27 banks. It includes a €3.1 billion 16-year facility covered by export credit agencies Hermes and Sace, as well as by the Federal Republic of Germany under its Untied Loan Guarantee Programme called "UFK" which covers political and commercial risk similar to Hermes.

 

The covered loan is split between a €1.6 billion Hermes loan, a €1 billion UFK loan and a €500 million Sace facility. There is also an €800 million, 10-year uncovered commercial loan. The debt covers 70% of the project cost, while the shareholders will provide the remaining 30%, the Nord Stream consortium said on its website. The Nord Stream consortium, which involves Russian gas export giant Gazprom, Germany's E.ON and Dutch Gasunie, aims to have the twin pipeline up and running in 2011 and 2012, bringing 55 billion cubic metres of Russian gas to Germany and further to other EU countries each year.

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