Germany's BASF joins Russian South Stream pipeline project

[News_Editor]

Germany's BASF joins Russian South Stream pipeline project

2011-03-22 05:35:04 GMT+7 (ICT)

NOVO-OGARYOVO, RUSSIA (BNO NEWS) -- Germany's BASF on Monday joined the Russian South Stream pipeline project after signing a memorandum with gas giant Gazprom.

The Memorandum of Understanding (MoU) was signed by Alexey Miller, Chairman of the Gazprom Management Committee and Jurgen Hambrecht, Chairman of the BASF SE Board of Executive Directors in the presence of Russian Prime Minister Vladimir Putin.

The document outlines the participation of the German company to join the construction of the gas pipeline offshore section. Under the terms of the MoU, Wintershall Holding GmbH will acquire a15 percent stake in the South Stream project, while Gazprom will retain 50 per cent.

With the agreement, Wintershall Holding GmbH will participate in the construction of the pipeline project. The memorandum also stipulates the conclusion of new long-term contracts for natural gas supply to the joint venture company Wintershall Erdgas Handelshaus Zug AG (WIEE).

Gazprom and Wintershall have a long history of partnership. The two companies have worked together in the joint pre-development of the Achimov deposits in the Urengoy field and in the launch of the Nord Stream gas pipeline construction.

"The interest of European energy majors in the partnership within the South Stream project proves significance and relevance of the project for Europe," said Gazprom's Miller.

The South Stream project consists in the construction of a gas pipeline running under the Black Sea to the countries of Southern and Central Europe. It was designed in order to diversify the routes of natural gas supply to European consumers.

The overall design capacity of the offshore section will reach 63 billion cubic meters per year. The first gas pipeline string is scheduled for commissioning in late 2015.

Wintershall Holding AG operates in the power generation industry and is a wholly owned subsidiary of BASF. WIEE is a joint venture of Wintershall and Gazprom set up in 1993.

Wintershall holds a 15.5 percent stake in another major project by Gazprom, the Nord Stream gas pipeline. The two companies also are partners in developing the Yuzhno-Russkoye oil and gas field.

-- © BNO News All rights reserved 2011-03-22