BASF subsidiary Wintershall will acquire a 15% percent stake in the company South Stream A, which will develop, construct and operate the offshore section of the South Stream Pipeline which will run through the Black Sea. BASF intends to channel some €2 billion (US$2.8 billion) into the gas pipeline, according to Russian Deputy Prime Minister Igor Sechin at the signing of the Memorandum of Understanding with Gazprom.
Gazprom will retain its 50% shareholding according to the agreement.
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 southeast Europe. The Memorandum was signed in the presence of the Russian Prime Minister Vladimir Putin.
The South Stream project is designed to create a new transport path for Russian gas to Europe across the Black Sea, bypassing Ukraine. The first pipeline comes on stream in 2015 at the earliest. The overall project is made up of three parts:
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Increasing capacities in Russia towards the Black Sea;
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Constructing four parallel gas pipelines, each around 940 kilometers (584 miles) long, through the Black Sea with a planned total capacity of 63 billion cubic meters per year; and
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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 current 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.