China may finance Russia’s natural gas pipeline to Europe
Gazprom’s Nord Stream 2 pipeline may get Chinese financing if European companies are forced out of the project by the latest round of US sanctions, business daily Vedomosti reports.
Russian officials have already contacted Chinese banks, sources have told the media.
“Nord Stream 2 has a good rate of return and low risks for creditors. Chinese banks may be interested," explains Aleksey Grivach, deputy CEO at Russia's National Energy Security Fund.
The extension will double the existing pipeline which delivers natural gas to Germany under the Baltic Sea and is estimated to cost €9.5 billion.
Initially, Engie, OMV, Royal Dutch Shell, Uniper, and Wintershall were to get a 50 percent stake minus one share in Nord Stream 2. However, red tape at the European Commission made Gazprom and its partners come up with another financing option. Under this plan, European companies will each provide an equal long-term loan to Gazprom, which will fully own the pipeline.
Financing of Nord Stream 2 may be affected by new US sanctions which target firms investing in Russian gas and oil projects. According to the new bill passed by the US Senate, and currently, before the House of Representatives, companies will be forbidden from making investments of over $1 million in the Russian energy sector.
On Wednesday, Russian President Vladimir Putin met the CEO of Royal Dutch Shell, Ben van Beurden. Among other things, they discussed Nord Stream 2. Van Beurden told Interfax the new project "will be realized for the benefit of all parties - both Europeans and the Russian Federation."