January 30, 2018 / 5:16 PM / 3 months ago

UPDATE 1-Nord Stream 2 to tap banks around end of this year, says CFO

* Suppliers and export credit agencies committed -CFO

* Says all necessary permits expected by the summer (Adds detail, quotes, background)

By Shadia Nasralla

VIENNA, Jan 30 (Reuters) - Gazprom’s 9.5 billion euro ($11.8 billion) Nord Stream 2 pipeline project will tap banks for financing in the fourth quarter of 2018 or early next year, its Chief Financial Officer Paul Corcoran told Reuters on Tuesday.

Nord Stream 2’s financing structure requires its Western partners — Uniper, Wintershall, Shell , OMV and Engie — to step in as long-term investors if banks do not cover its costs.

Corcoran said that all of Nord Stream 2’s suppliers and export credit agencies were still committed to the project despite U.S. and Polish opposition to the plans.

“Now the next step is to start preparing the deal in detail and then bring it to the bank market, hopefully later this year (in the fourth quarter). At the latest in the first quarter next year,” he said.

Nord Stream 2’s Western partners put in 1.4 billion euros in 2017, with Gazprom providing the same amount in equity.

The project is currently collecting permits from Russia, Finland, Sweden, Denmark and Germany. But late last year Denmark passed a law that could allow it to ban the pipeline from going through its waters.

Corcoran said plans were in progress to identify potential alternative routes for the pipeline.

“If the route is slightly longer, going north of Bornholm, for example, then you have additional material, additional pipe, additional construction time, additional survey costs, environmental costs,” he said.

“It would cost more but it’s difficult to say what that final cost would be.”

However, Corcoran said construction was on track to begin in the summer and he expects Nord Stream 2 to have received all necessary permits within the coming months.

“The permit process in Russia takes longer than in the other countries. We hope to have an on-shore permit in Russia in April and the off-shore permit in May or June. And those would be the latest permits.” ($1 = 0.8055 euros)

Editing by David Goodman

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