Nord Stream 2 Financing Agreement

Posted on Posted in Uncategorized

In June 2015, an agreement was signed between Gazprom, Royal Dutch Shell, E.ON, OMV and Engie for the construction of two additional lines. [9] Due to the blocking of the creation of a joint venture by Poland, Uniper, Wintershall, Engie, OMV and Royal Dutch Shell signed a financing agreement on 24 April 2017 with Nord Stream 2 AG, a subsidiary of Gazprom, responsible for the development of the Nord Stream 2 project. Under the agreement, each of the five companies will provide 950 million euros, of which 285 million euros will be paid in 2017. The loan of the five companies covers 50% of the cost of the project for an amount of 9.5 billion euros. The rest would be financed by Gazprom, which remains the sole shareholder of Nord Stream 2 AG. [10] Although the pipeline has not received formal approval from Denmark, Sweden and Finland, it is expected to be commissioned in 2019-20. [10] [11] In August 2019, it was reported that the pipeline was 70% complete. [12] According to the European Gas Transport Network (ENTSOG), an industry association, the total cost of the project in its 10-year network development plan published in November 2019 is 8 billion euros (US$9 billion). [13] The ENTSOG TYNDP-Projektcode of Nord Stream 2 is TRA-F-937. [13] The project was originally to be carried out by a consortium consisting of Gazprom (with a 50% share) and Engie, OMV, Shell, Uniper and Wintershall (10% each) The State Committee of the State however, after challenging, in August 2016, the negative effects of the transaction, in which Western European companies had acquired shares in the consortium, on the vote, the Polish Competition and Consumer Protection Office (UOKiK) has renounced to formally acquire the shares of Nord Stream 2 AG.

This led to months of discussions between Gazprom and its Western European partners on the new model of cooperation and financing of the project. The companies argue that a stake in a business is a prerequisite for a transaction to be considered the creation of a joint venture. They therefore argue that the conclusion of the financing agreements was not a merger within the meaning of Article 13, paragraph 2 of the Polish Competition and Consumer Protection Act and therefore did not require the prior approval of the UOKiK. The notification requirement and prior authorization (Article 13, paragraph 1 of the Law) apply only to transactions that are listed as mergers covered by section 13, paragraph 2 of the Act. Nord Stream 2 AG has signed financing contracts with ENGIE, OMV, Shell, Uniper and Wintershall for the Nord Stream 2 pipeline project. On 24 April, Nord Stream 2 AG signed contracts in Paris with five Western European energy companies: Engie, OMV, Shell, Uniper and Wintershall, to finance the Nord Stream 2 pipeline project.