Gazprom teams with OMV for expansion of Nord Stream gas pipeline
4/1/2016 12:00:00 AM
By Denis Pinchuk and Kirsti Knolle
ST. PETERSBURG/VIENNA (Reuters) - Russian oil major Gazprom signed cooperation deals today with Austrian energy group OMV as it tries to secure more lobbying power for its project to expand the Europe-bound undersea gas pipeline, Nord Stream.
Russian gas supplies, which account for one-third of European gas consumption, have been increasingly politicized due to Moscow's involvement in the Ukrainian crisis.
Gazprom wants to bypass Ukraine, a prime route for Russian gas to Europe, by expanding a network of undersea pipelines, primarily Nord Stream, which runs via the Baltic Sea to Germany—plans opposed by Brussels.
Alexei Miller, Gazprom's long-standing CEO, said "there is no doubt" that the construction of Nord Stream-2, which foresees the doubling of the existing pipeline's capacity to 110 Bcm, will be over by the end of 2019.
However, some European leaders are against the project, which is backed by E.ON, Germany's Wintershall , Shell, OMV and Engie.
Europe has been seeking to cut reliance on energy supplies from Russia as political tension has risen between the two over numerous issues, such as Moscow's involvement in the Ukraine's crisis and the eastward expansion of NATO.
The existing Nord Stream pipeline is not utilized at full capacity due to anti-monopoly rules in Europe, known as the Third Energy Package. Gazprom insists that Nord Stream-2 is legal.
Gazprom said the deals signed with OMV in St. Petersburg on April 1 included Russian oil supplies to the Austrian company.
A source familiar with Gazprom's plans said the Kremlin-controlled company wants to use OMV's lobbying power to get Nord Stream-2 on track. "That's the main task of Friday's event, to secure OMV's lobbyism," the source said.
A preliminary asset swap deal was agreed in September 2015. Under the deal, OMV will acquire a 24.98% of areas IV and V of the Achimov formation of the Urengoy oil and gas field in Siberia.
Miller also said on Friday that the company expects record-high gas exports to Europe this year after they rose by 29% to 44.4 Bcm in the 1Q.
(Reporting by Denis Pinchuk in St Petersburg and Kirsti Knolle and Alexandra Schwarz-Goerlich in Vienna; writing by Vladimir Soldatkin; editing by Dmitry Solovyov and Clelia Oziel.)
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