• Natural Gas News

    Nord Stream: It’s Up and Running

    old

Summary

Nord Stream had what it took to bring the project together, according to the consortium’s Finance Director, Paul Corcoran, who said stakeholders had taken an enormous amount of care with the planning, the environmental work and also the communication with all the stakeholders.

by: Drew Leifheit

Posted in:

, Nord Stream Pipeline

Nord Stream: It’s Up and Running

In his introduction to a session dedicated to “The Great Pipeline Debate” at the European Gas Conference in Vienna, Austria, Chairman Simon Blakey said he’d start with a representative of Nord Stream, since it was not just in the planning stages, but was up and running.

Towards that end, he introduced Paul Corcoran, Finance Director of the Nord Stream pipeline.

Mr. Blakey recalled what he termed Mr. Corcoran’s greatest moment with Nord Stream: “I remember meeting him in October 2008, where you may remember there was something called a credit crunch – a major problem for financing anything, anywhere and Paul was, at that moment, going out to try and raise money from the financial community and succeeded.”

Mr. Corcoran proceeded to tell everyone how he did it, saying that Nord Stream’s implementation touched upon the themes of the conference: diversification and security.

“This is a diversification of supply routes and it’s a significant contribution to Europe’s energy security. This is a project which has been realized by the market, by five energy companies. I think most of you are aware of the Nord Stream project,” he said.

He offered a description of Nord Stream as twin pipelines through the Baltic, one of which had already been completed; a total capacity of 55 bcm: “Enough gas for 26 million households.

“Europe’s very fortunate in having vast gas reserves on its doorstep: in Norway and North Africa, in the Middle East and in Russia,” he continued. “Russia bears 25% of the world’s proven gas reserves – that’s a very important factor for Europe’s energy security.”

Corcoran contended that within that context, pipelines were the most secure form of natural gas supply. He added, “The more pipelines to Europe, the better the security of supply. That includes South Stream, White Stream, Nabucco.”

He spoke of the inauguration ceremony for Nord Stream, which featured four national heads and the EU commissioner as well as five CEOs of the energy companies involved in the project.

“That picture really says everything about the project,” he explained. “This is an involved project, it’s a strategic project for both Russia and Europe. And it’s a tremendous investment. 

“Imagine you’re a banker looking at that photo, you know you’re going to get your money back,” quipped Mr. Corcoran.

He said that Nord Stream had a great team and that it was a pleasure being part of the project. Corcoran went on to outline what it took to bring things together.

“We’ve taken an enormous amount of care with the planning, the environmental work and also the communication to all the stakeholders, and transparency. We’ve selected excellent business partners, technical excellence all the way and a special focus on security.”

He named the partners: Gasunie, Gazprom, BSF Wintershall, E.ON, GDF Suez – “A very very strong consortium.”

Mr. Corcoran reported that Nord Stream had spent more than EUR 140 million on the environmental work necessary and the permitting process, on a national level with the five host countries as well as with the EU, and with all of the stakeholders around the Baltic Sea to satisfy everyone’s concerns with the project.

He said that more than 30 banks had provided capital to the company, commenting: “The financing structure is extremely solid. There’s a high proportion of equity provided by our shareholders, which signals their strong commitment to the project. Seventy percent of the financing is coming from the bank market,” he explained.

According to him, the project had been financed in two phases, the first in the depths of the financial crisis; the second phase, he said, had not been much better. “But both were extremely well received by the market and it proves if you have the right components for the project you can get something done no matter what the financial situation is. We received EUR 6.4 billion from the bank market.”

He added that it was a significant investment into the European economy in a time of recession in many countries across Europe.