Wintershall Joins Nord Stream II Project Expansion

Wintershall, a unit of chemicals group BASF, has signed a Memorandum of Intent  with Gazprom for the expansion of the Nord Stream II natural gas pipeline. 

The agreement announced on Friday in Berlin, sees the German company join in the addition of Lines 3 and 4 will enable the pipeline to deliver up to 55 billion cubic meters of Russian gas annually to Germany via the Baltic Sea.

In a press release Gazprom Deputy Chairman Alexander Medvedev said “taking into consideration the growing demand of the European Union, the expansion of the gas transportation infrastructure that links the gas fields in Russia directly to European markets, will further enhance the security of gas supply to the European continent.”

Germany has been the biggest customer of gas from Gazprom and purchased 38.7 billion cubic meters in 2014. This amounts to approximately one-third of all Gazprom exports to Western Europe.

Earlier this month cooperation with the consortium was discussed, which consists of Gazprom, Shell, E.ON and OMV.  A Memorandum of Intent was signed by the companies at the 2015 St. Petersburg Economic Forum (SPIEF) in June.

Preliminary costs of construction of the Nord Stream II is €9.9 billion, said Gazprom CEO Alexey Miller earlier in July. The construction consortium is planned to be launched by this September, with the project itself expected to be started by the end of 2019.

In another press release from Friday Wintershall confirmed its forecast of 0.8 percent annual growth in gas demand in the EU which would continue until 2040 and gas production in the region would fall 2 percent annually. This would help Russia retain its position of the main provider to the market.

Wintershall holds a 15.5 percent stake in Lines 1 and 2 that have been operational since October 2012.

As reported by Russian news outlets, Gazprom CEO Alexey Miller said the consortium may too be joined by Engie (formerly GDF Suez).