Russia’s Gazprom has signed agreements with five European energy companies to secure long-term financing for the €9.5bn Nord Stream 2 project.

Engie, OMV, Shell, Uniper and Wintershall have committed to offer long-term financing for 50% of the total cost of the project.

The European companies will provide up to €950m each for the project, while Gazprom will continue to remain as the sole shareholder of the project company Nord Stream 2 AG.

In a joint statement, the companies said: “The financial commitment by the European companies underscores the Nord Stream 2 project’s strategic importance for the European gas market, contributing to competitiveness as well as medium and long-term energy security especially against the background of expected declining European production.”

The 1,220-km Nord Stream 2 gas pipeline will transport natural gas from Russian gas reserves to European consumers via the Baltic Sea to Greifswald, Germany. The pipeline will have a total annual capacity of 55 billion cubic meters.

Nord Stream 2 AG is responsible for the planning, construction and operations of the Nord Stream 2 pipeline.

Each company will offer €285m as long-term funding facility for the project and the remaining €665m will be provided to meet short and long-term funding and guarantees.

Shell said: “The draw down of the 665 million fund will depend on future decisions by Nord Stream 2 AG in respect of the overall financing of the project.”

Gazprom has 50% stake in the project while other partners include BASF/Wintershall, Engie, E.On, OMV and Shell each with 10% interest.

Construction of the pipeline is scheduled to start in 2018 and will be completed by the end of 2019.

Image: Nord Stream 2 AG and European energy companies sign financing agreements. Photo courtesy of Nord Stream 2 AG.