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TALLINN - Nord Stream signed letters of commitment with 24 banks as it raises 2.5 billion euros to expand a pipeline to ship Russian gas under the Baltic Sea to Germany, reports Bloomberg. The Nord Stream venture, led by Russia’s Gazprom, plans to close financing for the second phase of the project by the end of January, Frank Dudley, a spokesman for the Zug, Switzerland-based venture, said by phone on Dec. 16. He declined to name the banks involved, saying 21 of them also took part in the first-phase financing.
Nord Stream is building the first of two parallel 27.5 billion-cubic-meter-a-year pipelines, which will start delivering Russian gas to the European Union, bypassing transit states such as Ukraine, next year. The project partners plan to double capacity by adding the second line a year later.
The venture raised 3.9 billion euros from 26 banks in March for the first phase of the project, which backed construction of the first of two lines.
The banks offered 60 percent more loans than needed for the second phase of the project, Dudley said. The first-phase financing was also 60 percent oversubscribed.
Gazprom owns 51 percent of Nord Stream, while Germany’s Wintershall Holding and E.ON Ruhrgas hold 15.5 percent each, and Nederlandse Gasunie NV and GDF Suez SA have 9 percent each.