FORTUM (FINLAND)
Fortum is among leading energy companies in the North European countries, which operations embrace the whole energy chain, including production, processing, distribution and marketing as well as related services to be rendered in energy engineering, equipment operation and repair.
The company’s customers are the international oil companies, industrial enterprises, energy companies and individual consumers. Fortum is the largest company of Scandinavia in terms of customers servicing.
The basic area of the Company’s commercial operations is Northern Europe. Besides, Fortum accomplishes its operation approximately in 30 countries all over the world.
Fortum is the market leader in the Baltic Sea region as the producer of high-quality oil-derived products. In the market of northern countries the Company holds the second place among the companies generating and distributing electricity. It is also the leading company in heat production.
The commercial oil and gas operations include:
Fortum’s share comprises about 75% in wholesale of oil products in Finland. Fortum produces gas in Norway, oil in Norway, Oman and Russia.
Gas supplies from Russia to Finland started in 1974. At present, supplies are carried under the contract valid to December 31, 2014. Neste Company was Gazprom’s major partner in the Finnish gas market development.
In 1998, a decision was taken to establish energy holding Fortum concern based on the state heat-and-power Imartan Voima Company and Neste Oil-and-gas Company.
Gazum Joint-stock company
In March 1994, Neste and Gazprom decided to establish the joint-stock company Gazum. Gazprom’s share in the company comprised 25%. Initially Neste possessed a 75% share in Gazum. In May 1999, Fortum concern sold 50 % of its shares. It was one of the EU Antimonopoly committee’s preconditions to approve establishment of the concern.
At present Gazum’s shares are allocated as follows:
Consortium of Finnish woodworking enterprises holds a 6% share.
Company Gazum is an importer of the Russian natural gas. It sells natural gas to end consumers, operates and develops gas-transport system in Finland.
Joint-stock company NordTransGaz
In the middle of 1990s, the idea to transport Russian gas to Germany along the Baltic seabed was only mulled. The new gas export route should connect Russia’s unified gas supply system directly with consumers in the countries of the European Union. It will facilitate diversification of gas exports and enable operational maneuverability. From the geographical point of view, it will lay the new "northern route" for Russian gas, avoiding the states with unstable economy. As a result, it will decrease political risks significantly enhancing reliability of gas supplies to the Western Europe.
Energy resource base for the gas pipeline project will be deposits of the Nadym-Pur-Taz oil-and-gas-bearing region, Shtockmanovskoye field in the Barents Sea and deposits of the Yamal peninsula.
To realize the project, in 1997 Gazprom (50%) and Neste (50%) established the joint venture in Finland , the NordTransGaz company.
In 2001, Gazprom and Fortum, after a scrutinized analysis of probable routes for the North-European gas pipeline, came to a conclusion on the project feasibility choosing the "sea" variant of pipeline going from Russia through the Gulf of Finland and the Baltic Sea to the coastal Germany. The pipeline will be fed up through the Unified gas supply system due to development of gas-transmission capacities in Russia.
Key parameters of the North-European gas pipeline (the sea variant, one line) are as follows: capacity, up to 18.7 bcm of gas per year, pipeline, 1,189-km-long, 1067 mm in diameter. one compressor station, working pressure, 20.0 Mpa. Total capital expenditures amount to USD billion, 2.9. Further works under the project will be directed to determine the optimum route of the gas pipeline with maximum use of gas-transmission capacities under operation.
Realization of the project is about to start. In April 2001, leading German companies such as Ruhrgas AG and Wintershall AG claimed their willingness to join Gazprom and Fortum in the North-European gas pipeline project. However, the final decision to join the project has not been taken up to now.
It is necessary to note that the Dutch company Gasunie has shown interest to participate in realization of the North-European gas pipeline project. The government of the Netherlands gives support to the North-European gas pipeline and Gasunie’s participation in the project. The Netherlands’ Minister of foreign trade Mr. G. Ibema at the meeting with Gazprom’s leadership on September 25, 2001 declared official statement on the matter.
On 1 March 2002, in the course of meeting of the NordTransGas’s management committee held, agreements to work out strategy of further development of the project were reached.
Joint projects
Fortum enters into a consortium of the firms participating in development of the Shtokmanovskoye gas condensate field in the Barents Sea. In 1996, the Agreement on cooperation confirmed the parties’ intention to cooperate in the development of this deposit.
Consortium consists of Gazprom (50%), Conoco (12.5%), Fortum (12.5%), Norsk Hydro (12.5%), Total (12.5%).
The field is located 500 km to the north off Murmansk in the Barents Sea. The sea water depth in the licensed area is 280-360-m-deep. Proved gas reserves amount to 3.2 bcm. Development of the field will be carried out based on production sharing.