Gazprom Advances With German Marketing, Loses Baltic Partner

20.05.2005 | Pressemeldung

Russia’s Gazprom has taken two steps forward in plans to supply more gas into southern Germany, but one step backward in losing a strategic backer for its North European Gas Pipeline (NEGP) project.
Finland-based Fortum on Wednesday indicated that it no longer wants to be in the top tier of Gazprom’s NEGP promoters, when it pulled out of the 50-50 North Transgas pipeline study group that it formed in 1997 with the Russian company.

For the German marketing push, Gazprom has signed an important storage deal in Austria. Gazprom, the German-Russian marketer Wingas, and Austrian oil and gas producer RAG will convert the Haidach gas reservoir in Austria, now owned by RAG, into the second-largest underground gas storage facility in Central Europe.

Total investment in the project is estimated at €250 million ($316 million), to be split equally among the three, with each receiving one-third of the resulting 2.4 billion cubic meters (85 billion cubic feet) maximum working gas storage capacity. The Haidach facility - to be designed, built and operated by RAG - will become Austria’s largest gas storage unit, and is located in the northwest of the country, near the German border.

In Western Europe, it will be second only in size to Wingas’ own 4 Bcm storage facility at Rehden in northern Germany. Wingas is the fourth-largest gas marketer based in Germany, with 2004 sales of 17.7 Bcm. Now 65%-owned by BASF subsidiary Wintershall and 35% by Gazprom, its parent companies last month signed a package of agreements that may lead to a respective 51-49 ownership split (IOD Apr.12,p3).

Gazprom may be positioning for more direct sales into southern Germany, after it signed a contract earlier this week with Austria’s largest oil and gas group OMV to book 4.4 billion cubic meters per year of transportation capacity for Russian gas across Austria for 20 years, starting in 2007 through OMV’s West Austria Gasleitung (WAG) pipe, from the Slovak border near Baumgarten to the south German border at Uberackern, near Burghausen (IOD May18,p8).

Gazprom has yet to indicate who in Germany may buy the extra volumes transported through Austria from 2007, but the storage deal indicates that cooperation with Wingas is likely. These small pragmatic deals contrast with limited progress in Gazprom’s grander $3 billion-plus project to build the subsea 30 Bcm/yr NEGP link, including investment by Western partners like Germany’s BASF and E.On, and Dutch gas firm Gasunie. In pulling out of its North Transgas pipeline study group, Fortum said: "As stated for several years, Fortum sees itself as a major user of natural gas, not as a builder of gas infrastructure. The divestment of the North Transgas shares is a natural consequence of this strategy."

Senior Vice President Tapio Kuula said Fortum remains interested in buying incremental Russian gas for its Stockholm and mid-Sweden gas-fired power plants, and is pleased that a possible spur from NEGP could supply such volumes - but not based on pipeline investments by Fortum itself. He told International Oil Daily that Fortum is not looking for a substantial increase in its gas purchases in Finland. Finland consumes 5 Bcm/yr, mostly supplied by the Gasum joint venture of Gazprom, E.On Ruhrgas and the Finnish state, in which Fortum is the main shareholder with 31%. (Mark Smedley, London)