Germany

Germany has been and remains the largest Russian natural gas buyer. The total volume, including trading in this country, reached 34.0 billion cubic meters in 2012.

Germany has been and remains the largest purchaser of Russian natural gas. The total volume of 2008 exports to this country stood at 37.7 billion cubic meters. Russian natural gas deliveries to German are made under LLC Gazprom Export contracts signed with E.ON Ruhrgas AG, WIEH GmbH & Co KG, and WINGAS GmbH.

The total volume of natural gas exported by Russia to Germany since the start of deliveries (in 1973, including the former German Democratic Republic) up to present has reached about 899.5 billion cubic meters. The Ruhrgas Corporation was founded in 1926. It is one of the largest gas transmission companies in the world. Its operations include the purchase and transmission of natural gas along main pipelines, with its subsequent sale to gas distribution firms. The company is also involved in the comprehensive design, construction and operation of gas transmission systems.

The major German energy concern E.ON AG became Ruhrgas AG’s unitary shareholder in the early 2003.
The E.ON Ruhrgas AG company imports natural gas from Russia, the Netherlands, Norway and Denmark, providing for about 50 percent of the gas delivered to the German market. It also ensures the transit of Russian gas to France and the Netherlands.
Russian natural gas is delivered to E.ON Ruhrgas AG for distribution in Germany and Switzerland under 7 long-term contracts. The annual commitments are limited to 22 billion cubic meters (including 0.38 billion for the Swiss market).

In addition, a long-term agreement has been in force with E.ON Ruhrgas AG since October 1, 2001 on the transit of Russian natural gas through Germany to the Netherlands and Belgium. A series of other short-term contracts are also in effect.
In all, over 534 billion cubic meters of gas totaling more than 63.1 billion dollars have been delivered to E.ON Ruhrgas AG since the exports began.

April 1999 saw the registration under Russian federal law of Gerosgaz (CJSC), a joint venture between Gazprom and Ruhrgas AG that, among other things, trades on the Russian securities market. E.ON Ruhrgas AG controls about 6.7 percent of JSC Gazprom’s shares (about 3.5 percent of the shares directly, and the other three percent through CJSC Gerosgaz).

In August 2006, Gazprom Export and E.ON Ruhrgas AG signed four prime contracts for the period between 2020 and 2035, with the volume of annual deliveries under the prolonged contracts reaching 19.8 billion cubic meters.
In order to improve the efficiency of Russian gas sales and increase their share on the Germany market, JSC Gazprom and Wintershall (100- percent owned by BASF AF) created two joint enterprises in Germany — WIEH (1990) and WINGAS (1993).

Three prime long-term contracts have been concluded with WIEH and WINGAS for the delivery of 22.3 billion cubic meters per year in the plateau period, with another long-term contract signed for the delivery of 5 billion cubic meters of gas per year to Romania. LLC Gazprom Export has signed an agreement with WIEH, WINGAS and WIEE extending these contracts till 2031.

After JSC Gazprom created its subsidiary in Britain — the Gazprom Marketing & Trading Ltd. (GM&T) — it began to develop cooperation with WINGAS concerning gas sales on the British market. The first, small deliveries began in 1999. Shipments were made using the Gazprom-owned reverse flow capacities of the Interconnector gas pipeline.

In September 2003, Gazprom Export and WINGAS signed a long-term Agreement on the sale of natural gas on the British market, which is valid till 2013. Delivery volumes reached around 5 billion cubic meters in 2008.

The volume of Gazprom Export deliveries made via the WINGAS and WIEH firms to German, Belgium and Britain reached 23.4 billion cubic meters in 2008.
Gazprom Export and WINGAS are also successfully implementing a deal concluded within the frameworks of the ENI Gas Release Program. The deal provides that Gazprom Export purchases (and subsequent resells) up to 250 million cubic meters of gas from WINGAS at the Baumgarten hub (Austria) in the period between 2004 and 2009. At the same time, WINGAS purchases the equal amount of gas from Gazprom at the Velke Kapusany gas entry point (Slovakia).

Joint efforts further saw the construction and commissioning of the STEGAL (stretching 323 kilometers with an annual capacity of 16 billion cubic meters of gas) and MIDAL (stretching 642 kilometers with an annual capacity of 13 billion cubic meters of gas) system of main gas pipelines. By creating the MIDAL–STEGAL system, Gazprom gained direct access to the German gas market alongside other large local gas transmission companies — such as Ruhrgas, RVE Gas, Gasunie Deutschland and others. The total capital investments in the MIDAL–STEGAL system and the Rehden UGSF reached some 4 billion German marks (Gazprom’s share — about 1.4 billion German marks).

The WEDAL gas pipeline (stretching 294 kilometers) was commissioned at the end of 1998. It linked the WINGAS gas transit system with the gas transit system of Belgium, and from there, with the Interconnector gas pipeline. The WEDAL gas pipeline is, first and foremost, intended for transporting British gas under contracts the WINGAS company signed with British Gas (later ceded to Electricity de France) and Conoco. This guarantees the diversification of WINGAS delivery sources. WEDAL is also used for shipping gas to the British market.

The process of Gazprom’s integration into the European gas system received a further boost with the implementation of the Yamal– Europe project, through which WINGAS receives some 4 billion cubic meters of gas annually. The Yamal–Europe gas pipeline was launched in November 1999. The main pipeline passes through Belarus and Poland, crossing Germany in the region of Frankfurt (Oder), where it links up with the YAGAL–Nord gas transport system, which connects this pipeline to the STEGAL–MIDAL–Rehden UGS gas transmission system.

Gazprom operates Germany’s Rehden USG jointly with WINGAS. At the same time, the share of Gazprom’s gas volume stands at up to 2.3 billion cubic meters.
In addition, a gas storage facility construction project is also being implemented in cooperation with WINGAS and RAG (Austria) — the Haidach UGS in Austria. The construction of its first leg was completed in mid-2007. The facility was launched with an operating volume of 1.3 billion cubic meters of active gas. Construction is proceeding on the project’s second leg, which is due to be commissioned in 2011. Upon its completion, the Haidach UGSF will become the largest gas storage facility in Austria, and the second-largest in Central Europe.

In July 2008, a joint venture between Gazprom and Germany’s Wintershall Holding AG — a closed joint-stock company called Achimgaz — launched the pilot production of Block 1A of the Achimov deposits at the Urengoy oil, gas and condensate field, which is located in the Yamalo-Nenets Autonomous Okrug. The field’s development is due to last for 43 years. Around 200 billion cubic meters of gas and 40 million tons of condensate are due to be produced over the entire development term. Its rated capacity stands at around 8.3 billion cubic meters of natural gas and 2.8 million tons of condensate per year.

On September 8, 2005 Gazprom and German companies BASF AG and Е.ОН Rurgaz AG signed in Berlin the Basic Agreement on Nord Stream gas pipeline construction. According to the document the partners established the joint venture named «Nord Stream AG» in which Gazprom controls 51% of the capital and Wintershall Holding (branch of BASF AG) and Е.ОН Rurgaz AG (till July, 1, 2004 Rurgaz AG; since February, 2003 is integrated into E.ON concern) - 24,5 % and 24,5 % respectively.

Within the frameworks of Gazprom Group’s business development strategy in Europe, Gazprom Export, Gazprom Marketing & Trading, and Gazprom Germania are also reviewing the prospects of implementing new electric power projects in Germany.

Following 2011, Gazprom Export’s delivery volume in Germany, Belgium and the Britain through WINGAS and WIEH was more than 20 billion cubic meters.

 

Related news:

Eco‐friendly Mobility for Poland – 07.11.2013

Eco‐friendly Mobility for Poland – 07.11.2013

A new highly efficient combined heat and power plant launched in Germany – 21.10.2013

Germany overtakes Britain as Europe’s biggest gas user – 08.10.2013

WINGAS launches a storage facility in Jemgum – 16.09.2013

GAZPROM Germania Takes Combined Heat-and-Power Plants Online – 12.09.2013

GAZPROM Germania expands network of natural gas filling stations – 03.09.2013

The eighth CNG filling station of Gazprom Germania launched at the German Baltic Sea coast – 01.08.2013

NGV scores a double triumph at Scirocco R-Cup opening – 08.05.2013

Construction of NEL last line approved by German authorities – 12.02.2013

WINGAS successfully implements program to reduce CO2 emissions – 07.02.2013

Gazprom Group successfully developed motor fuel business in 2012 – 24.12.2012

European price correction agreements signed – 17.01.2012

Gerhard Schröder confident European demand for Russian gas will only grow – 04.08.2011

German Bundestag approves nuclear phase-out bill – 01.07.2011

WINGAS achieved a new record in energy sales in 2010 – 19.05.2011

In Germany, construction of the NEL pipeline has begun – 15.04.2011

After laying off seven nuclear power plants Germany became an energy importer – 13.04.2011