Gazprom and Gasunie sign agreement on cooperation within Nord Stream and BBL projects

November 6, 2007, 15:45

Today, in the presence of Vladimir Putin, President of the Russian Federation, and Jan Peter Balkenende, Prime Minister of the Netherlands, Alexey Miller, Chairman of the Gazprom Management Committee and Marcel Kramer, CEO of N.V. Nederlandse Gasunie have signed an Umbrella Agreement on the joint participation of both companies in the Nord Stream and BBL gas pipeline projects as well as on the use of gas transportation capacities of Gasunie on the territory of the Netherlands.

According to the Agreement Gasunie will receive a 9 per cent share in the Nord Stream AG share capital, coming from Wintershall and E.ON Ruhrgas that will each cede 4.5 per cent of the shares, while Gazprom will have an option to acquire 9 per cent in BBL Company.

Upon execution of the deal, the shareholding structure in Nord Stream AG will be as follows: Gazprom (51 per cent), Wintershall Holding and E.ON Ruhrgas (20 per cent each), N.V. Nederlandse Gasunie (9 per cent).

“The Agreement signed signifies the beginning of a new phase of cooperation with Gasunie. By implementing large-scale projects aimed at secure supply of European consumers we will significantly contribute to ensuring the energy security of the continent,” said Alexey Miller.

“This Agreement is an important step forward. The cooperation between Gasunie and Gazprom has been over many years very fruitful and fully supported by the authorities of both countries. The participation of Gasunie in the Nord Stream project as a fourth partner points to a broad European scope of this project. This project is of great importance for European supply security, especially due to the fact that domestic production in Europe is declining while demand for gas as the most environmentally safe fossil fuel is steadily high,” said Marcel Kramer.

Background

N.V. Nederlandse Gasunie is a gas infrastructure and transmission company based in the Netherlands. The company owns one of the largest gas distribution networks in Europe, which is some 12,000 km in overall length, and annually supplies a total of some 100 bcm of gas, which is a significant part of the total European gas consumption.

Gasunie’s operations on the market are steady, efficient and secure. Thanks to the reliability and strategic location of Gasunie transportation system versus growing international gas supply flows, the Netherlands is strengthening its positions as a gas business center in North West Europe. In June 2006 the Nord Stream project partners chose Gasunie to be the forth shareholder.

In October 2006 the parties signed the Memorandum of Understanding related to issues of cooperation within the Nord Stream and BBL projects.

The Dutch BBL Company (BBL: Balgzand Bacton Line) is responsible for constructing and operating the BBL interconnector between the Netherlands and the Great Britain. The shareholders of BBL Company are Gasunie (60 per cent), E.ON Ruhrgas (20 per cent) and Fluxys (20 per cent).

Nord Stream AG (initially named as North European Gas Pipeline Company) was established in December 2005 to provide engineering, construction and operation of the Nord Stream gas main.

The gas pipeline length is 1200 km. Nord Stream’s first line with the throughput of 27.5 bcm per year will be commissioned in 2010. The construction of the second line will double the throughput to 55 bcm per year. Nord Stream will be fed with gas from UGSS.

In 2000 the European Commission gave Nord Stream Project a special status of the Trans-European Network (TEN). According to the forecasts, gas import by the EU will increase 200 bcm or more than 50 per cent in the nearest 10 years. Thanks to the integration of the world’s largest gas reserves located in Russia and Europe’s gas transportation system, Nord Stream will enable to satisfy nearly 25 per cent of said additional needs in gas imports.

Wintershall Holding AG – is a BASF AG 100 per cent subsidiary, which specializes in oil & gas prospecting and production, natural gas marketing. Wintershall Holding AG is the largest oil and gas condensate enterprise in Germany.

Part of E.ON Group from February 2003, E.ON Ruhrgas AG (Ruhrgas AG until July 1, 2004) is responsible for gas business in Europe including natural gas production, marketing, transportation and storage.

Information Division, OAO Gazprom

N.V. Nederlandse Gasunie Press Service

All news for November 2007