Nord Stream – Current Status And Progress Achieved So Far Russian Economic and Financial Forum in Switzerland Paul Corcoran, Financial Director, Nord Stream AG – Zurich, 17 March 2008
Jan 02, 2016
Nord Stream – Current Status And Progress Achieved So Far Russian Economic and Financial Forum in SwitzerlandPaul Corcoran, Financial Director, Nord Stream AG – Zurich, 17 March 2008
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A NEW NATURAL GAS SUPPLY ROUTE FOR EUROPE
• 1,220-kilometre-long offshore natural gas pipeline across the Baltic Sea
• Two parallel pipelines with a total capacity of 55 bcm per year
• Connecting Western European natural gas network with Russian gas reserves
• From Germany, natural gas can be transported to Denmark, the UK, the Netherlands, Belgium, France and other countries
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~ 175
55
Import gap 230 bcm
Additional gasimports needed
Nord Stream
Domestic production Existing imports/agreementsAdditional gas import requirement
712 bcm
2015
530 bcm
2005
Imports75%
59%
EU domestic gas production
SIGNIFICANT CONTRIBUTION TO SECURITY OF SUPPLY
44
THE NEW SHAREHOLDER STRUCTURE
Current 51%
51%
24,5%
20%
-
9%
24,5%
20% Future
Advantages of the new structure
• Operational and technical expertise of Gasunie in the construction and operation of pipelines
• Strengthening of wider European character of Nord Stream
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COMPLIANCE WITH INTERNATIONAL LEGAL FRAME
• United Nations Convention on the Law of the Sea (freedom of the high seas includes freedom to lay submarine cables and pipelines)
• Espoo Convention (international consultation process), Council Directive 97/11/EC of 3/3 1997
• European Directive on Environmental Impact Assessment
• Cooperation with the Helsinki Commission – HELCOM
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• Consultation process started in April 2006
• Formal inter-governmental Notification in November 2006
• Regular meetings within the Espoo framework
• Updated status documentation delivered in October 2007
• Distribution of draft transboundary EIA report to involved country authorities in December 2007
• Final transboundary EIA report currently being finalised
STATUS OF INTERNATIONAL CONSULTION PROCESS INVOLVING ALL BALTIC SEA STATES
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NATIONAL APPROVAL PROCESSES
• Nord Stream is subject to national legislation in each of the countries through which it passes: Finland, Sweden, Denmark and Germany (‘Parties of origin’) and Russia
• Example of Sweden
• Submission of application documents to Swedish government on 21 December 2007
• First official response of Swedish government on 12 February 2008 requesting additional information
• Submission of applications in Russia, Denmark, Germany and Finland to follow
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PIPELINE DESIGN
• Two pipelines, almost in parallel, with an inner diameter of 1,153 mm, and a design pressure of up to 220 bar
• Steel wall thickness in the range of 26.8 mm to 41.0 mm
• Concrete coating with a thickness ranging between 60 mm and 110 mm to give added weight sufficient to stabilize the pipeline on the seabed
• Midway service platform to facilitate pipeline maintenance and inspection by “intelligent pigging”
220 bar 100 bar
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ECONOMIC IMPACT FOR EUROPEAN SUBCONTRACTORS
• A great volume of business generated for various supplier companies all over Europe
• All contractors selected on the basis of competitive tenders
• Subcontractors for environmental studies and technical design
• Environmental Impact Assessment (EIA) prepared by Rambøll, Denmark
• Environmental studies carried out by Marin Mättinek (MMT), Sweden, and Institut für Angewandte Ökologie (IfAÖ), Germany
• Technical engineering conducted by Snamprogetti, Italy
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MAJOR SUPPLY CONTRACTS CONCLUDED
• Conclusion of supply contracts and Letters of Intent important steps towards efficient and timely project implementation
• Supply agreements are concluded for the first pipeline: one million tons of steel pipes are ordered
• Europipe (Germany) to supply 75% – order value 1.2 bn EUR
• OMK (Russia) to supply 25% – order value 0.4 bn EUR
• Further tender will be issued for 2nd pipeline
• Letter of intent has been signed with SAIPEM (Italy) for pipe-laying contract
• Letter of Intent for logistics (concrete coating, pipe storage, transport) due to be signed with EUPEC in March
• Locations: Mukran (D), Kotka, Hanko (FIN), Slite and Karlshamn (SW)
• Order value ca. 650 mio EUR
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STRUCTURE OF FINANCING
• Financing structure
• 30 per cent of project costs by equity contributions from shareholders
• 70 per cent financed externally through limited recourse finance (lenders to be determined in the near future)
• Financial advisors chosen
• Société Générale
• ABN Amro
• Dresdner Kleinwort
• Currently, framework of bank participation is being prepared
• Support of export credit agencies also an option
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Feasibility Study
Conceptual Design
Detailed Design
Laying Line 1
Commiss-ioning Line 1
Commiss-ioning Line 2
Laying Line 2
EIA & Approvals
2011 20122009-20102005-20061997-1999 2006-2009 2011-20122007-2008
TIMEFRAME MEETS EU’S NEEDS FOR GAS
Key issues in 2008
• Detailed technical planning for construction work
• Completion of Environmental Impact Assessment
• Finalization of contracts for key investments (pipes, logistics, pipe lay)
• Determination of external project financing
• Ongoing dialogue with authorities in the Baltic Sea region
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Contacts
Nord Stream AG
Grafenauweg 2
6304 Zug / Switzerland
Phone: +41 (0) 41 766 91 91
www.nord-stream.com
Paul Corcoran
Financial Director