Will China finance Nord Stream 2?

Preliminary consultations were held with Chinese banks on financing Nord Stream 2 in case Gazprom's European partners cannot continue financing the project due to the sanctions proposed by the United States.

The construction of Nord Stream 2 is estimated at 9.5 billion euros. Initially, it was assumed that five Western European companies - Gazprom's partners in this project - would be included in the consortium Nord Stream AG 2. However, in the spring of this year, Gazprom agreed to a new method of financing. Gazprom remains the sole shareholder of Nord Stream AG 2, while Western companies have pledged to provide a total of 4.75 billion euros (about 950 million euros each) in long-term loans.

Information about plans for new US sanctions against Russia, including, among other things, will complicate financing above a certain amount for the construction of a Russian export pipeline. The draft sanctions bill was passed by the US Senate, but will only come into force after House approval and signing by President Donald Trump.

According to gas market analysts, if the sanctions were adopted in the same version as they were in the US Senate, the construction of Nord Stream 2 could lose its meaning. Another analyst, Peter Stewart of Interfax Global Energy Services, does not view negotiations with Chinese banks as a way to hedge against the sanctions. In his opinion, "it is necessary to attract billions of credit lines and the consortium is ready to consider all options."

Nord Stream 2 will be built on the bottom of the Baltic Sea, parallel to the Nord Stream gas pipeline, which has been operating since 2011. These should be two branches with a design capacity of 55 billion cubic meters of gas per year from Russia to Germany. Gazprom's partners in this project are five Western energy companies: Austrian OMV, German BASF-Wintershall and Uniper (separated from E.On), French Engi and Anglo-Dutch Royal Dutch Shell. The pipeline will be ready by the end of 2019, and then Russia plans to stop using gas transmission systems passing through Ukraine. The construction of Nord Stream 2 is opposed by Poland, the Baltic states and Ukraine, according to some experts.