UPDATE: OMV sees Nord Stream-2 financing plan revised due to sanctions

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MOSCOW, Sep 13 (PRIME) -- Austrian oil and gas firm OMV expects that a financing plan for Russia-led Nord Stream-2 gas pipeline project will be revised due to the new U.S. sanctions, as project financing to cover 70% of the project’s costs as planned initially will unlikely be organized, OMV CEO Rainer Seele told reporters on Wednesday.

Participants of the project will likely have to either search funds at Russian and Asian banks or invest more of their own funds, he said.

“We will have to make it more clear for everyone that we support this project and do not plan to scrap it. Apparently, we will certainly have to revise the situation with financing of the Nord Stream-2, but obligations on this project, obligations to finish the project certainly remain, and all these enterprises, which gave these obligations, will try to fulfill them,” Seele said.

“We will not apparently manage to fulfill that part of financing of 70%, but the management of the project will obviously search other possibilities… We will have to assess effects of sanctions on this project. We will have to look more at Asian and Russian banks and think less about banks in Europe and the U.S.,” he said.

Partners in the project are ready to provide bridge financing for it if necessary, he added.

The Nord Stream-2 project envisages construction of two lines of a natural gas pipeline with an annual capacity of up to 55 billion cubic meters, running from the Russian shore to Germany under the Baltic Sea. Russian gas giant Gazprom will implement the project together with its European partners – Shell, OMV, Engie, Uniper, and Wintershall.

Nord Stream 2 AG and European partners earlier signed a financing agreement, under which the companies are to provide up to 950 million euros each before 2019 at 6% annually. At the same time, Nord Stream-2 planned to attract 70% under a project financing scheme.

In August, U.S. President Donald Trump signed a bill introducing additional sanctions against Russia among several other states. The bill prohibits companies to invest more than U.S. $1 million in a single payment or more than $5 million during the course of a year in construction of Russian export pipelines, as well as provision of goods, services, technologies and information support for the construction.

Seele also said that the new U.S. sanctions will not affect OMV’s projects in Russia.

“If you are talking about our investments in gas projects in Russia – whether we are talking about the Achimov deposits or the Yuzhno-Russkoye field – we do not see a negative impact and will continue these projects,” he said.

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