Nord Stream Costs to Exceed 5 Billion Euro

Nord Stream AG, a consortium that plans to build a natural gas pipeline below the Baltic Sea, expects construction costs to amount to "significantly" more than 5 billion eur, managing director Mattias Warnig told Die Zeit.

The consortium, in which Russia's OAO Gazprom owns a 51-percent stake and Germany's BASF AG and E.ON AG each own 24.5 percent, previously said construction costs will rise above the initially estimated 5 billion eur, and also said it expects gas shipments to start in spring 2011, pushing back its original 2010 start date.

Warnig said in an interview with Die Zeit to be published tomorrow the consortium will during the coming months disclose a more precise estimate of construction costs, after purchase contracts are signed.

Warnig defended the consortium's decision to build a submarine pipeline instead of choosing an overland route and said the profitability of a submarine pipeline during the first 25 years of operations is 15 percent higher.

The pipeline will connect Russia's Vyborg and the German city of Greifswald.

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