The anticipated total capital cost of the project is 7.4 billion euros. Nord Stream is confident that this will be the final cost, regardless of the current economic environment.

The investment budget is 7.4 billion euros. The budget figure is calculated on the basis of the contracts for pipe production, logistics and pipe laying. They are the main cost factors for offshore pipeline projects. The costs of the environmental studies and the measures taken to minimise environmental risks must also be taken into account. As for the financing structure, about 30 percent of the project costs will be equity contribution by shareholders. It is foreseen that the remaining 70 percent will be financed externally by banks and export credit agencies.

Nord Stream’s total project budget is based on careful assessment of all cost drivers, and includes financing costs and also an allowance for contingency. Most of the key contracts, such as those for pipe production for the first line and pipe laying and logistics for both lines, have already been signed. This gives Nord Stream a firm grip on the project budget. Nord Stream does not expect a budget increase because of the situation on financial markets, and in fact the current reduction of steel prices on the world markets will offer the opportunity to produce budget savings. The project’s financing structure is highly robust and conservative. The shareholders of Nord Stream AG will finance about 30 percent of the project costs, with 70 percent to be financed externally via project financing from banks and credit export agencies. The project is attractive to lenders since it is an important energy-market infrastructure with stable and long-term returns and it has strong backing from its shareholders and a solid contractual framework.

Nord Stream’s shareholders are the leading global energy companies Gazprom, BASF SE/Wintershall Holding GmbH, E.ON Ruhrgas and the European gas infrastructure company N.V. Nederlandse Gasunie. Each of these shareholders has a solid financial foundation. Nord Stream AG has substantial share capital reserves of its own, from 1.3 billion euros in 2008 to approximately 2.5 billion euros during construction. Nord Stream has also entered into insurance arrangements according to the industry standards for construction of an offshore pipeline. The project is insured according to a Construction All Risks policy, which involves a panel of underwriters comprised of major names in the insurance market. Every partner involved in the Nord Stream project enjoys the reputation of providing safe and secure natural gas supplies over many years. Nord Stream will construct the pipeline using leading industry expertise in engineering design and construction for offshore pipelines with the utmost attention to implementing the project and operating the pipeline in a safe and environmentally friendly way.

Nord Stream is a commercial company with the objective to build an offshore pipeline. Its solution is economically favourable; the shareholders have assessed their investment carefully – as can be seen from BASF SE’s eco-efficiency analysis, for example. Nord Stream offers distinct advantages in terms of energy efficiency compared to onshore routes or LNG transport. Compared to possible onshore alternatives, the Nord Stream Pipeline needs fewer compressor stations, less space and less maintenance work. Thus, it is more economical and environmentally friendly – greenhouse gas emissions are avoided and the total costs are lower. The environmental impact is also smaller than that of onshore pipelines. Nord Stream will be laid at a speed of about 2.5 kilometres per day, which is much faster than pipe laying on land; therefore, there will be fewer and shorter environmental disturbances than on land. Apart from only minimal and temporary impact on the environment during installation, Nord Stream will have hardly any impact during operation. Numerous offshore pipelines in the North Sea have this kind of a limited footprint. An offshore pipeline is also safer when it comes to possible disturbances by human activity. An offshore pipeline will not cross hundreds of kilometres of forests, fields, farmland and populated areas, but will be laid on the seabed, away from human activity.