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.
Russian-based energy company Gazprom is pursuing the project and will remain the sole shareholder of the project company, Nord Stream 2.
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The 1,220km Nord Stream 2 gas pipeline has a total capacity of 55 billion cubic metres a year.
It provides a direct link between Russian gas reserves and European gas consumers from the coast of Russia via the Baltic Sea to Greifswald, Germany.
The energy companies are party to the agreement and have committed long-term financing, covering 50% of the total expense incurred on the project. The budget allocated for the project currently stands at $10.3bn.
Each of the five European energy companies has earmarked a share of up to $1.03bn for the project.
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By GlobalDataThe investment reflects the strategic importance of the project for the European gas market.
It also contributes to competitiveness, as well as medium and long-term energy security, especially against the background of expected declining European production, noted Nord Stream 2.
The company has stated that the construction work will commence in 2018 and will be completed by the end of 2019.
Earlier this month, Nord Stream 2 signed a contract with Allseas for the offshore pipelay through the Baltic Sea.
Additionally, Nord Stream 2 has initiated the environmental impact assessment (EIA) procedure in compliance with Russian law.
