Wintershall, the oil and gas subsidiary of the German chemical giant BASF, continues to find new ways to sustain its challenge to the European gas establishment.
Its latest move is to form an influential group to seek a large tranche of natural gas from Norwegian offshore waters. The appearance of the group is a highly political move that presents GFU, Norway's centralized gas sales organization, with a dilemma.
Two years ago GFU rebuffed Wintershall's first attempt to sign up significant quantities of Norwegian gas, a move interpreted in some quarters as evidence Norway is not interested in assisting a company intent on upsetting the status quo in the European gas business.
This time around Wintershall is leading a group of units of Ste. Nationale Elf Aquitaine, Austria's state owned OMV, Polish Oil & Gas Co., Slovak Gas Industry, Czech Gas Co., and Hungary's MOL Rt.
At an initial meeting in Norway this month, the Wintershall group indicated it is interested in purchasing 10-13 billion cu m/year, about 967,000 MMcfd-1.451 bcfd, starting in the mid-1990s. At this stage the group has not said how the gas will be divided among the partners.
POLITICAL DILEMMA
But with Norway's Labor government favoring the principle of using natural gas, preferably from the North Sea, to help clean up the environment in the former Soviet satellites, it will be hard for GFU to ignore a group with such a high profile East European pedigree.
Less than even handed treatment for the group could also lead to criticism from the European Community leadership, which is keen to stimulate competition in the European gas market of the kind being promoted in Germany by Wintershall.
The Wintershall group's approach has come at a time when interest in Norwegian gas is high. Companies from Britain, Belgium, and eastern Germany are at the negotiating table, and buyers under the existing Troll/Sleipner contracts have options to increase volumes.
In the near term there could be a shortage of gas from the North Sea. Whether in the current political climate this is a good enough reason for declining serious negotiations with Wintershall is debatable.
GAS FOR OPEN ACCESS LINES
Large volumes of North Sea gas contracted to the Wintershall croup would ensure long term viability of Germany's first two gas transportation systems that will be open to third party customers. All the existing long distance gas trunklines are controlled by the established gas companies which jealously guard access to their assets.
Wintershall operates both new pipelines. The Midal line provides a system from the North Sea coast of Germany to the southern part of the country, and the Stegal project offers links into eastern Europe.
Wintershall ruffled a few feathers when it announced plans for the new pipelines. But this was nothing compared with the rumpus caused by Wintershall's joint venture with Gazprom, the Russian gas company, and the subsequent attempt to raise the price of some German gas imports from the former Soviet Union.
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