Five European companies to fund Nord Stream 2

Andrew Cummings
April 26, 2017

European companies Shell, ENGIE, OMV, Uniper and Wintershall have signed financing agreements with Nord Stream 2, which is responsible for the construction and operation of Nord Stream 2 gas pipeline project. The pipeline will double Nord Stream's existing capacity, which delivers natural gas to Germany under the Baltic Sea bypassing Ukraine.

He attributed the decrease in Gazprom transit supplies to the fact that an ever-increasing share of hydrocarbons is extracted in Russia's Yamal Peninsula.

"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", Nord Stream 2 said.

Opponents of the project also worry it would sharply reduce the need for Russian Federation to export gas through Ukraine, depriving Kiev of lucrative transit fees.

A new pipeline from Russia's Arctic fields to Germany will boost Moscow's share of the European gas market despite competition from Qatar and the United States, and will also mean much less fuel goes via Ukraine, Russian gas monopoly Gazprom said. It believes it could ship more despite the EU's fears that the bloc is becoming too reliant on Russian energy.

According to Miller, the market share of Russian gas in Europe will continue to grow at least until 2035, as the continent's output falls.

Gazprom-led Nord Stream 2 has signed financial agreements with five major energy companies, including supermajor Shell, for the Nord Stream 2 pipeline project.

The 1,200-km (746-mile) pipeline is slated to carry Russian gas to European Union member Germany via the Baltic Sea.

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