Wintershall said it plans to join the new gas pipeline project led by Russia’s Gazprom that’ll deliver up to 55 billion cubic meters of gas annually to Germany via the Baltic Sea.
A memorandum of understanding was signed by BASF/Wintershall and Gazprom Friday.
“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,” said Gazprom Deputy Chairman Aleksandr Medvedev in a press release Friday.
E.On, OMV and Royal Dutch Shell have already agreed to participate in expanding Nord Stream. A memorandum of intent was signed by the companies at the 2015 St. Petersburg Economic Forum (SPIEF) in June.
READ MORE: Russia to construct new gas pipeline to Germany via Baltic Sea – Gazprom
The preliminary cost of construction of the Nord Stream-2 is €9.9 billion, said Gazprom CEO Aleksey 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.
According to Miller, the consortium may be soon joined by Engie of France (formerly GDF Suez).
The Nord Stream-2 project is expected to follow the line of Nord Stream. Gazprom will retain a 51 percent stake in the project, while other shares will be divided between foreign shareholders.
Construction of the 1,224-kilometer Nord Stream pipeline began in 2010. The two adjacent pipelines have been operational since 2011 and 2012, with the annual gas throughput expected to reach 55 billion cubic meters.
Wintershall is a subsidiary of chemical giant BASF, and is the largest crude oil and natural gas producer in Germany.
Biggest gas customer
In a Friday press release 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.
In May 2015 Germany purchased 68 percent more gas compared to May 2014, Gazprom CEO Aleksey Miller said at a meeting with President Putin in June.
“This points to the fact that the demand for Russian gas is growing and there is no doubt that the issue of new contacts for long-term Russian gas supplies to the European market is on the agenda of talks with our European partners,” he said.
Germany has been the biggest customer of gas from Gazprom, buying 38.7 billion cubic meters in 2014. This is roughly a third of all Gazprom exports to Western Europe.