Russia's Gazprom gives $1.2 billion contract to Putin's friend without considering other bids
Stroytransneftegaz (STNG) has been chosen as the general contractor for the construction of certain sections of the North Stream gas pipeline totaling a length of 538 km, RBC news agency reports. The contract’s value is estimated at 74.6 billion rubles ($1.18 billion USD), and the customer is PJSC Gazprom, represented by Nikolai Shendelev, Deputy Director of Gazprom invest.
RBC news agency reports that there is no information on the contractor included in the contract published on the public procurement site. However, if a blank area on the second page of the general contract agreement is copied and pasted into a text editor, Stroytransneftegaz is indicated as the "general contractor", with an address of Startovaya street #8 in St. Petersburg.
The text noting JSC Stroytransneftegaz is also contained on the 60th page of the agreement, where the addresses of the parties and bank details are indicated. The right side of the page also contains “invisible" text with contact details for JSC Stroytransneftegaz as the general contractor. The same address is noted; the office of the company Stroyneftegaz is also indicated in information on the company's website.
Last February, businessman Gennady Timchenko told RBC that he and his family own at least a half of Stroytransneftegaz. Timchenko owns 31.5% of the company Volga Group. According to SPARK (Russian online service for Verification, analysis and monitoring of companies), 100% of JSC Stroytransneftegaz belongs to the British company Alkor Holdings Limited.
The contract includes a general agreement for the construction of two sections of a linear portion of the land-based section of the Nord Stream 2 pipeline. This is a portion from Gryazovets to KS Slavyanskaya, which covers sections from kilometer 0 to 319 and from kilometer 319 to 538. It is projected that the pipeline will become operational in December 2019.
The Nord Stream 2 project involves the construction of two gas pipeline lines with a total capacity of 55 billion cubic meters of gas per year from the Russian coast, through the Baltic Sea, to Germany. The cost of construction is estimated at 9.5 billion euros. It is expected to launch before the end of 2019.
The operator of the gas pipeline construction project is Nord Stream 2 AG, the only shareholder of which is Gazprom. Initially, it was assumed that Engie, OMV, Royal Dutch Shell, Uniper and Wintershall would also receive shares. However, in spring 2017, they signed an agreement to a new model of financing. The agreement assumes that European companies commit to provide long-term financing for 50% of the total cost of the project; that is, 950 million euros in total.