If the European natural gas market is ever liberalized, one of the catalysts will have been Wintershall AG, Kassel, Germany.
This small oil and gas company is being backed by parent BASF AG to force a way into a German market dominated by Ruhrgas AG.
Wintershall set itself the target of taking a 10% share of the German gas market within this decade, rising eventually to 15%. This would require domestic sales of 12-15 billion cu m/year.
There were barriers, mainly the facts that Wintershall had no major source of gas, no national transportation system, and no customers outside Munster.
PIPELINES FIRST
Wintershall decided pipelines must come first. So it started a 4.6 billion deutschemark ($3.3 billion) joint venture to build two pipelines and a gas storage facility.
The Saxony-Thuringia Natural Gas Pipeline (Stegal) runs 320 km from the Czech border through two densely populated, industrialized areas to Hessen. Construction, which started in September 1991, is complete. Stegal is filled with gas and ready to supply its customers starting Oct. 1.
The Central German Connecting Line (Midal) will run 640 km from Emden on the North Sea coast, linking to Stegal at Hessen, then running southwest to BASF's massive plant at Ludwigshaven. Construction began in May and will be complete in time for first deliveries in autumn 1993.
But Wintershall's coup was to secure the entire production from new Russian gas fields beyond 1997 through a joint venture with Russia's state gas company, Gazprom.
The German and Russian companies formed the joint venture Wintershall Erdgas Handelshaus GmbH, based in Berlin, to construct Stegal and Midal and supply it with 13.5 billion cu m/year of Russian gas for the German market. Another 5 billion cu m/year is under contract for sale in eastern Europe.
This venture has sales contracts for 3.5 billion cu m/year to date, including 1.5-2 billion cu m/year for BASF's plant, 430 million cu m/year in Saxony and Thuringia, and as much as 2.5 billion cu m/year through Midal. The latter includes as much as 1.5 billion cu m/year for Hamburg and I billion cu m/year to Gasversorgung Suddeutschland GmbH of Stuttgart. The venture also is pursuing contracts to supply the towns of Leipzig and Chemnitz.
SECURITY
Wintershall is keen to make its gas supplies more secure. Russia, it says, is a safe bet. Now it is talking to Den norske stats oljeselskap AS in the hope of having a significant amount of Norwegian gas in the system by 2000.
Ruhrgas has reacted strongly to Wintershall's progress.
"The price war started by Ruhrgas will lead to us walking up to our knees in blood," says Wintershall Chairman Herbert Detharding. "But it will be Ruhrgas' own blood."
Copyright 1992 Oil & Gas Journal. All Rights Reserved.
