Nord Stream estimates project budget at 7.4 billion Eu
Zug, Switzerland – Following an assessment of the key cost drivers, Nord Stream AG currently estimates the overall project budget at 7.4 billion Euros, which makes it one of the largest private investments in infrastructure in Europe. As a “project of European interest” according to the European Union’s TEN-E (Trans-European Energy Networks) guidelines, Nord Stream represents a key element for the development of the Internal Energy Market of the European Union. It reinforces economic growth and the creation of employment. For the European Union, realisation of the TEN-E strategy calls for total investments of roughly 19 billion Euros in gas projects alone to diversify the energy mix, and to increase import capacity with additional supply routes. The Nord Stream project is a substantial step in achieving the EU’s energy supply goals.
The recalculation of the overall project budget follows contracts with Europipe and OMK for pipe production, as well as Letters of Intent (LOI) with Saipem for pipe-laying and EUPEC for logistics. A more precise budget estimate for the project will be made after all contracts are finalised, taking into account all cost factors. The current budget calculation reflects the latest market, and recent project developments, especially those related to steel prices and additional expenditures on technical and environmental safety.
Paul Corcoran, Nord Stream’s Financial Director, explains: “Naturally, the budget differs from those initial assumptions made before specific requirements of our unique project were known in detail. We are now in the final stages of fixing all important contracts, and we are satisfied with the terms and conditions we negotiated with our major suppliers. They provide a solid basis for our budget estimate.”
Upon completion, Nord Stream will deliver 55 billion cubic meters of natural gas per year, which accounts for 25 per cent of the additional demand expected in the European Union by 2015.