Alexey Miller, Chairman of the OAO Gazprom Management Committee, and Dr. Jürgen Hambrecht, Chairman of the Board of Executive Directors of BASF SE, signed a Memorandum of Understanding in March 21, 2011, which will see the BASF subsidiary Wintershall acquire a 15 percent stake in the company South Stream AG.
Gazprom will retain its 50 percent shareholding according to the agreement. The company South Stream AG will develop, construct and operate the offshore section of the South Stream Pipeline which will run through the Black Sea. The Memorandum of Understanding also stipulates the conclusion of new long-term gas supply agreements for the joint natural gas trading company WIEE (Wintershall Erdgashandelshaus Zug) for its sales activities in south-east Europe. The Memorandum was signed in the presence of the Russian Prime Minister Vladimir Putin.
"Our Company and Wintershall have a long history of partnership that overcame such challenges as joint pre-development of the Achimov deposits in the Urengoy field and 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 Alexey Miller.
"With Gazprom and other European partners we have already shown how we can enhance the security of the natural gas supply in Europe with the Nord Stream Baltic Sea Pipeline. Together we are now strengthening supply security in the south-east EU Member States, where Gazprom and Wintershall have already been successfully involved in gas trading for many years. As economic growth in the region increases, so does the demand for gas. In the future, we can supply these customers directly and reliably via the South Stream pipeline," Dr. Jürgen Hambrecht explained.
South Stream Pipeline
The South Stream project is designed to create a new transport path for Russian gas when the first pipeline comes on stream, in 2015 at the earliest, which will provide a reliable supply for customers in south and south-east Europe. The overall project is made up of three parts: increasing capacities in Russia towards the Black Sea, constructing four parallel gas pipelines, each around 940 kilometers long, through the Black Sea with a planned total capacity of 63 billion cubic meters per year, and extending the pipeline to southern and central Europe. The founding partners of South Stream AG are Gazprom and the Italian company ENI. It is planned that the French company EdF will also participate in the project.
The partnership between BASF subsidiary Wintershall, the largest German producer of oil and gas, and Gazprom, the world's largest producer of gas, extends from the exploration and production of natural gas in western Siberia, to the construction of the Nord Stream Pipeline, and the sale of gas in Germany and Europe via the joint gas trading companies WIEH, WIEE and WINGAS. Founded in 1993, WIEE supplies gas to customers in Romania and Bulgaria and also develops the infrastructure in the markets in south-east Europe. To date WIEE has supplied more than 48 billion cubic meters of natural gas to Romania and over 8 billion cubic meters to Bulgaria.