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Five European energy companies will pay as much as €950m each to fund the second leg of Gazprom’s controversial Nord Stream gas pipeline, as part of a finance package announced by the project’s partners on Monday.

Shell, Engie, OMV, Wintershall and Uniper will contribute half of the pipeline’s €9.5bn cost through long-term financing, with Gazprom paying for the remainder.

One person with knowledge of the talks told the FT that the financing would be in the form of loans.

Gazprom and its partners hope the finance package will skirt any legal hurdles for the pipeline and force it past opposition from many EU countries that think it will increase the bloc’s dependence on Russian gas. A plan to finance the pipeline through a joint venture was abandoned after anti-trust regulators in Poland, one of the pipeline’s most vociferous critics, blocked such a scheme.

The 1,220-km Nord Stream 2 gas pipeline, with a total capacity of 55bn cubic meters a year, will run alongside the already operational Nord Stream 1, and double Gazprom’s capacity between Russia across the Baltic Sea to Greifswald, Germany.

Construction work will begin in 2018 and will be completed by the end of 2019, the companies say.

Copyright The Financial Times Limited 2017. All rights reserved.
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