Major infrastructure project has total economic benefit to EU of €9.9
billion
LONDON–(BUSINESS WIRE)–The second part of a recent report from Arthur D. Little (ADL) – “Nord
Stream 2 economic impact in the construction phase” – analyzes the
economic effects (job creation and GDP) of the ongoing project to build
two new gas pipelines from Russia to Germany. The report, which is a
follow-up to an earlier report created in 2017, analyzes the current
status of project investment and concludes that the total economic
benefit to the European Union (EU) represents €9.9 billion for building
the pipelines. In comparison to the first report (2017), which was
carried out in the procurement phase, more than twice as much CAPEX has
now been committed and spent in several EU and non-EU countries now that
the project is in the middle of construction. More than 1,000
contractors from all over Europe and Russia are contributing to the
realization of the project. This includes both large international firms
providing materials or construction services and small enterprises
providing expert services. Furthermore, the investment until the end of
December 2018 creates 57,500 full-time job equivalents in the EU over
five years, adding €4.7 billion in GDP in various industrial sectors.
Nord Stream 2 is a major natural gas infrastructure project that aims to
build a pipeline system with 55 bcm per year of transport capacity. It
will safely and reliably export gas to the European market, where demand
is stable but indigenous production is decreasing, creating an import
gap.
The objective of the new Arthur D. Little study, commissioned by Nord
Stream 2, is to understand the direct, indirect and induced effects of
the project on the European economy, and on countries where actual
investments in the pipeline have been or are being made in more detail.
Compared to the previous report, the current one takes actual spent and
detailed supplier data until the beginning of operations into account.
It estimates the effects related to the execution of the project, as
well as those on supply chains and the wider economy. The analysis used
an economic modeling tool (IMPLAN) based on underlying statistical
databases for different economies. The study considers all committed and
spent investments as of the end of December 2018 of (CAPEX) €8 billion.
The most pronounced effects are seen in countries where major
project-related construction activities are taking place – Russia,
Germany, Finland, Denmark and Sweden; in countries traditionally
associated with the offshore oil and gas industry that host the majority
of service providers – the Netherlands, the United Kingdom, Norway and
Italy; and at the headquarters of the project developer and other
international service providers. The current study was complemented with
supplier interviews which confirmed the beneficial impact the project
has had on corporate development and local communities. Also highlighted
in the study were some of the major innovations and pioneering solutions
for challenges that resulted from project work.
Michael Kruse, Partner in ADL’s Energy & Utilities Practice, said: “At a
time when the oil and gas industry is experiencing cut-backs and
lay-offs, this report transparently demonstrates the benefits of large
energy infrastructure projects such as Nord Stream 2.”
The report can be downloaded here: www.adl.com/NordStream2impact.
Contacts
Cate Bonthuys
Catalyst Comms
+447746546773
[email protected]
