MOSCOW, March 18 (UPI) -- German oil and gas firm Wintershall will join the Russian-led South Stream pipeline consortium, an industry official has said, amid hopes that the project could receive backing from the European Union.
Wintershall, the oil and natural gas arm of German chemicals giant BASF, will join South Stream over the next few days, Paolo Scaroni, chief executive officer of Italian utility Eni, a South Stream consortium member, told The Wall Street Journal.
The move would lend the project "solidity not just in terms of who will be the buyers of the gas but also in terms of its perception in the EU," the newspaper quoted Scaroni as saying. "It won't fly unless the EU gives its support."
A pipeline project jump-started by the Kremlin to bypass traditional transit country Ukraine, South Stream would eventually move more than 60 billion cubic meters of natural gas per year to Europe.
It's backed by Russian state-owned energy giant Gazprom and Italy's Eni. France's EDF was also said to join the consortium.
A third European partner could boost the pipeline's standing in Brussels, which wants gas from suppliers other than Russia to diversify and boost its energy security.
The EU has lent its support to Nabucco, which would transport up to 31 billion cubic meters of gas per year from Caspian and Middle Eastern gas to Europe, bypassing Russia. The pipeline backed by Germany's RWE and OMV from Austria but hasn't secured definitive gas commitments.
Analysts have in the past accused Russia of launching South Stream to torpedo Nabucco. The consortium members involved deny this, arguing the pipeline makes economic sense. Experts doubt that there is room for both pipelines as they vie for similar sources and customers.
Thanks to its extensive business links with Gazprom, Wintershall would be an obvious partner for South Stream.
Both companies last week signed a memorandum of understanding that hands the Germans a stake in the development of oil and gas fields in western Siberia for giving Gazprom access to Wintershall's oil and gas projects in the North Sea.
Wintershall is also a partner in the Nord Stream pipeline currently under construction. Once completed, it would link Russia's Siberian gas fields under the Baltic Sea to customers in Western Europe. Apart from Gazprom and Wintershall, Germany's Eon Ruhrgas, Gasunie from the Netherlands and GDF Suez from France are involved.
