Gazprom, BASF in gas asset swap

Gazprom, BASF in gas asset swap

BERLIN - Agence France-Presse
Gazprom, BASF in gas asset swap

BASF headquarters in Ludwigshafen southern Germany is seen above. AP photo

German chemicals giant BASF and Russian energy firm Gazprom yesterday announced they were swapping certain strategic assets as the German firm seeks to bolster its natural gas production.

Wintershall, a BASF subsidiary, will acquire 25 percent plus one share of parts of a natural gas field in Siberia owned by Gazprom, with the option to increase its stake to 50 percent, the two firms said in a statement.

The parts of the field to be acquired contain an estimated 274 billion cubic meters of natural gas and 74 million metric tons of condensate. Together, this is equivalent to 2.4 billion barrels of oil, the statement added. Production is due to start in 2016.

In return, BASF will hand over its share of the natural gas trading and storage business that the two currently run jointly.

BASF’s share of these firms contributed 8.6 billion euros ($11.0 billion) to earnings last year.

Kurt Bock, the chief executive of BASF, said the swap was “consistent with our strategy to expand the exploration and production of crude oil and natural gas.” “Gazprom will become more active in the natural gas trading and storage business and we will jointly expand the production at the source,” added Bock.
The head of the Russian firm, Alexei Miller, said: “By increasing our share in the gas trading and storage business, we are continuing our successful activities to secure the supply of gas for Europe.” The transaction is expected to be completed by the end of next year, both firms said.