By Clive Freeman May 31, 2009, 14:56 GMT
Berlin - The economic crisis will not delay construction of a controversial undersea gas pipeline from Russia to Germany, according to a director of the Swiss-based Nord Stream concern promoting the project.
But the financial situation may result in 'dramatic changes' in the number of banks participating, says Dirk von Ameln. 'More and more banks are lacking the large amounts of money we would like to borrow from them,' he says.
'Whereas a year ago the talk was of three, four, or possibly a maximum of five banks being involved with big packages, now it could be as many as 10 to 20.'
This did not mean there was a risk of the project being delayed, he adds, because 'we have an agreement with our shareholders that they will provide us with shareholder loans should there be any delay in the bank financing.'
'We can go ahead. It's not the money we are lacking,' he told journalists in Berlin.
Work is set to begin in April 2010 on the 1,200-kilometre Nord Stream pipeline, which will run along the bottom of the Baltic Sea, mostly in Finnish waters, from Wyborg, west of St Petersburg, to Lubmin, near Greifswald in Germany.
When finished, it will have a 27.5 billion cubic metre gas capacity. Work on the second leg of the project is expected to start in 2013.
The German government's attitude towards the project remains 'very, very positive,' says von Ameln. 'But he cautions that the Nord Stream pipeline alone will not answer Europe's growing energy needs. Additional gas pipelines would have to be built, he says.
One is a South Stream pipeline that will lead to more Russian gas being transported across Europe via Bulgaria to Italy by 2013. Russia's Gazprom and Italy's Eni will be the builders.
This project foresees a 900-kilometre pipeline crossing the Black Sea, from Beregovaya on the Russian coast, to Varna in Bulgaria, and reaching a maximum water depth of 2,000 metres.
Early last year Russia and Serbia announced the setting up of a joint company when signing the South Stream agreement, which allows for the pipeline to pass through Serbia. The plans provide for a large gas storage facility to be built near Banatski Dvor in Serbia.
Russia and Hungary have a similar type arrangement in respect of the Hungarian section of the pipeline.
Before stepping down as premier of Italy, Romano Prodi was asked by Gazprom if he would like to become chairman of South Stream AG, an offer he subsequently rejected, unlike former German chancellor Gerhard Schroeder, who readily accepted an offer to head Nord Stream when he was voted out of office.
Critics of Nord Stream claim Europe might become dangerously dependent on Russian natural gas, particularly since Russia could face problems meeting a surge in domestic as well as foreign demand in the years ahead.
But von Ameln discounts such theories, saying that by 2025 Europe will need to import 195 billion cubic metres more gas than it does today if it is to cope with increasing energy demands.
'For 35 to 40 years we have had successful gas imports from Russia. These connections function,' he stressed, adding 'that the more the EU-Russia relations normalize the more people can view each other as good neighbours.'
Russia's Gazprom energy concern has a 51-per-cent stake in the venture and is in line for a windfall once the 7.4-billion-euro (10.3 billion dollars) Nord Stream project is realized.
Seventy per cent of the project finance is to be raised through loans this summer and another tranche 12 months later. The rest will be invested by the project's four shareholders, which include Germany's BASF and the Netherlands' Gasunie, in addition to Gazprom.
Russia needs permits from five countries - Finland, Sweden and Denmark among them - through whose territorial waters the pipeline will pass. It is expected the necessary permission will be granted by the end of the year, despite environmental reservations in some of the northern countries concerned.
The pipeline is destined to by-pass Ukraine, which earlier this year was involved in an energy dispute with Russia.
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