Today in Novo-Ogaryovo Alexey Miller, Chairman of the Gazprom Management Committee and Jurgen Hambrecht, Chairman of the BASF SE Board of Executive Directors signed in the presence of Russian Prime Minister Vladimir Putin a Memorandum of Understanding on the South Stream project, providing for participation of Wintershall Holding GmbH in constructing the gas pipeline offshore section.Comments by analysts and experts
The document outlines the basic terms, conditions and principles for the German company to join the offshore section of the project. For instance, the Memorandum identifies that Wintershall Holding GmbH will acquire a 15 per cent stake in South Stream AG, while Gazprom will retain 50 per cent.
The Memorandum also stipulates conclusion of new long-term contracts for natural gas supply to the joint venture company Wintershall Erdgas Handelshaus Zug AG (WIEE).
“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 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 increase European supply security with natural gas through the Nord Stream Baltic Sea Pipeline. Together we are now strengthening the supply security in the south eastern EU member states, where Gazprom and Wintershall have 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 directly and reliably supply these customers via the South Stream pipeline,” said Dr. Jürgen Hambrecht.
The South Stream project is implemented with a view to diversify the routes of natural gas supply to European consumers and envisages construction of a gas pipeline running under the Black Sea to the countries of Southern and Central Europe.
A provision is made to gradually build up the South Stream throughput. 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.
In January 2008 the South Stream AG joint project company (JPC) was registered in Switzerland. The company was established by Gazprom and Eni on a parity basis.
On November 27, 2009 Gazprom and EDF inked the Memorandum of Understanding on EDF's possible participation in constructing the South Stream gas pipeline offshore section.
On June 19, 2010 Gazprom, Eni and EDF signed the trilateral Memorandum providing for specific steps towards the French company's entry in the shareholding structure of South Stream AG.
The Memorandum contemplates that the entry will be implemented through Eni's stake reduction in the JPC.
BASF SE is the world's leading petrochemical company.
Its operational activities are focused on the following segments: chemicals, plastics, crop protection products as well as hydrocarbons extraction and transportation.
Being a wholly owned subsidiary of BASF, Wintershall Holding AG operates in the power generation industry.
BASF SE and Wintershall Holding GmbH partner Gazprom in developing the Yuzhno-Russkoye oil and gas field, pilot production from block 1A of the Achimov deposits in the Urengoy field as well as constructing the Nord Stream gas pipeline.
Wintershall Erdgas Handelshaus Zug AG (WIEE) is a joint venture of Wintershall and Gazprom.
It was set up in 1993 to supply Russian natural gas to Southeastern Europe and to analyze investment opportunities in the national markets of these countries. Since then, WIEE delivered over 48 billion cubic meters of natural gas to Romania and over 8 billion cubic meters to Bulgaria.