Bond liquidity

Bond liquidity

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Macaskill on markets

Macaskill on markets

Liquidity drought’s conflicted Cassandras

Nord Stream looks for flows in funding pipeline

At the start of this year, Gazprom cut off the gas it pipes to Ukraine in protest at unpaid bills. Supplies to Ukraine’s neighbours were also disrupted for several weeks. As concern spread across ­Europe over security of supply from the Russian state company that delivers 35% of the continent’s gas, executives of Nord Stream, a joint venture company in which Gazprom owns a 51% stake, were already sounding out bankers for the financing of a new pipeline project now at the start of construction.

Infrastructure boom hits capital desert

Two pipelines will run in parallel for 1,210 kilometres under the Baltic sea, from Vyborg in Russia, just north of St Petersburg, close to the border with Finland, running between the Baltic states and Poland to the south and Sweden and Denmark to the north before making land at Greifswald in Germany.

Back in 2005, it was estimated that the European Union’s annual requirement for gas imports would rise from 336 billion cubic metres to 536bcm in 2015. The pipeline under the Baltic is designed to supply just over 25%, 55bcm, of that increased 200bcm annual requirement.

The justification for running the pipeline under the sea is that it will be shorter, cheaper and have a greater capacity than a land-based pipeline and also be less damaging to the environment.

It will not be easy, though, and Nord Stream has been set a...

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