Nord Stream AG hired three banks to advise it on 2.5 billion euros ($3.4 billion) of loans to ship Russian gas under the Baltic Sea to Germany.
The Nord Stream venture, led by Russia’s OAO Gazprom gas- export monopoly, hired Commerzbank AG, Societe Generale SA and Royal Bank of Scotland Group Plc as advisers for the financing, Frank Dudley, a Nord Stream spokesman in Zug, Switzerland, said today by e-mail.
The financing will include 16-year borrowings backed by export credit agencies and 10-year portions from commercial lenders, he said.
The venture is building the first 27.5 billion-cubic-meter-a-year pipeline, which will start delivering Russian gas to the European Union bypassing transit states such as Ukraine next year. The project partners plan to double capacity by adding the second line of the same capacity a year later.
Nord Stream raised 3.9 billion euros from 26 banks in March for the first phase of the project, which backed construction of the first of two lines running side by side. The loans pay interest at between 160 basis points and 450 basis points more than the euro interbank offered rate, according to data compiled by Bloomberg. Banks offered 60 percent more loans than the company sought.
Nord Stream last month issued banks a request for proposals for financing the second phase of the project, aiming to conclude the contracts by the end of 2010.
Gazprom owns 51 percent of Nord Stream, while Germany’s Wintershall Holding AG and E.ON Ruhrgas AG hold 15.5 percent each, and Nederlandse Gasunie NV and GDF Suez SA have 9 percent each.