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Nord Stream credit crunch

The Nord Stream pipeline

Gazprom might in the course of June issue a 24 billion EUR guarantee for the Nord Stream project. Meanwhile, skeptics believe Sweden and Finland will not give their necessary approval of the plans.

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Nord Stream, the 1220 km long underwater pipeline which is to pump gas directly from Vybord (Russia) to Greifswald (Germany) is getting increasingly expensive. The original price tag of 2.5 billion EUR last year increased to 7.4 billion EUR. That might have been only a start.

According to Nezavisimaya Gazeta, Gazprom might in its annual assembly 24 June approve a 24.035 billion EUR guarantee for the project.

Gazprom, the operator of the project, does however itself experience serious financial difficulties. In the June assembly, the company’s shareholder will therefore be requested to endorse an additional 10.5 billion EUR of credit acquisitions. That will increase Gazprom’s debts burden further. The company from before has about 50 billion EUR of debts.

The credit crunch of Nord Stream comes at the same time as the company is having serious problems with convincing Swedish and Finnish authorities about its project plans. Skeptics believe neither of the two countries will give their green light to the Baltic Sea project, thus blocking further progress.

As reported by Nord Stream today, the nine-country public participation period on the project’s transboundary environmental report has now ended. The five countries, through whose waters the pipeline will pass – Russia, Finland, Sweden, Denmark and Germany – now have to consider potential transboundary environmental impacts of the pipeline before issuing permits to Nord Stream.