The new sanctions imposed on Russia by the US have made the financing of large projects such as the Nord Stream-2 pipeline through the Western banking system, “almost impossible”, the chief executive of Austrian energy company OMV, Rainer Steele, said this week, but insisted that the project would still go ahead. Speaking at a press conference held by the Russian-German foreign trade chamber of commerce, he predicted that Gazprom’s European partners in the project would either have to look at providing the finance themselves or turn to Russian and Asian banks for funding.
His remarks follow this summer’s vote by the US Senate to include the pipeline in new sanctions against Moscow which appeared to have thrown the project into uncertainty.
Due to be operational by the end of 2019, the Nord Stream 2 pipeline, which will run along the bed of the Baltic Sea between Russia and Germany bypassing UKrain, has become increasingly controversial in the wake of Russia’s annexation of Crimea. On completion, it will both deprive Kiev of gas transit income and deal a blow to EU attempts to reduce its member states’ dependency on Russia for its energy supplies, as it will double the capacity of the existing pipeline.
Supporters of the project, meanwhile, say that Nord Stream 2 is critical to safeguarding future gas supplies to the EU and OMV is among a group of Western oil majors that also includes Engie, Royal Dutch Shell, Uniper and Wintershall who have agreed to fund half the cost of the €9.5bn undertaking, with Gazprom stumping up the rest.
“We will need to assess the consequences of sanctions on this project,” Steele said. “In particular, we will check if we are able to comply with the requirements of export financing agencies… In the worst case scenario that we cannot raise a single euro from the banks, we may have to finance the whole project from our own funds.”