Despite the sanctions, Gazprom cooperates with BASF

The deal between the world's largest chemical company BASF and the Russian giant Gazprom was struck despite the current sanctions. BASF wants to exit the gas trade. BASF and Gazprom have agreed to carry out an equivalent asset swap, which was originally carried out at the end of 2014. As a result, Gazprom will be able to expand its presence in Western Europe.

BASF-Tochter Wintershall is looking to move away from the gas trade and instead focus on oil and gas production. Gazprom also acquires shares in Wintershall oil and gas production in the North Sea and mainly access to the retail market in Western Europe. At the same time, Gazprom is increasing oil and gas production in the North Sea off the coast of the Netherlands, Great Britain and Denmark by 50 percent. In exchange, Wintershall will receive just over a quarter of the revenues from the gas field in Western Siberia, at least 8 billion cubic meters of gas per year. The start of production is scheduled for 2018.

BASF and Gazprom, together with other members of the Nord Stream pipeline consortium, through shares in a joint venture, are planning to expand the Baltic gas pipeline. Gazprom has 51 percent in the new company. Eon, Shell, Austrian OMV Group and BASF each have 10 percent, French Engie will receive 9 percent.

This company is responsible for the construction of two additional pipelines from Russia through the German Baltic Sea - the so-called Nord Stream 2. These two additional pipelines should have an annual capacity of 55 billion cubic meters of gas. Thus, the overall potential of Nord Stream will be doubled.

The initial agreement was in December 2013. Business is faced with a tense political situation in Ukraine and economic EU sanctions against Russia due to the positions taken by the parties in the conflict. Implementation is now expected at the end of the year, according to BASF information.

A BASF spokesman said they never ruled out the exchange at a later date. Now it was decided jointly. “We are convinced that for a secure energy supply in Europe, we still need natural gas from Russian sources,” the company says.