Russ Oil-Gas

December 18, 2007 - The Associated Press - MOSCOW: Russia's state natural gas monopoly, OAO Gazprom, officially began production Tuesday at a vast field in western Siberia that will be an important source of gas for the Nord Stream pipeline project supplying Western Europe. Germany's chemical giant BASF AG has a 10 percent share in the Yuzhno Russkoye field, which has estimated recoverable reserves of about 600 billion cubic meters — roughly 1.5 times the amount of gas consumed in a year by all 27 European Union countries. Gazprom supplies about 40 billion cubic meters of gas to Germany annually. President Vladimir Putin praised the project as a positive step in ensuring the "economic stability" of Europe and Germany. "What matters is not the quantity of supplies, but the quality of relations between the partners," Putin said at a Kremlin meeting with German Foreign Minister Frank-Walter Steinmeier. "Cooperation between Gazprom and BASF is truly important, as it exemplifies an important step in our relations."The field, whose production was begun with Gazprom officials pressing a ceremonial button, will be one of the main sources of gas for the planned Nord Stream pipeline running from the Russian port of Vyborg under the Baltic Sea to Germany. Nord Stream will ship 55 billion cubic meters of gas a year, bypassing current routes through Belarus, Ukraine and Poland. Officials at the ceremony in Gazprom's headquarters in Moscow included Gazprom board chairman Dmitry Medvedev, who is likely to be elected Russia's president in March, having received Putin's endorsement. "It's an important period in the life of our country. The presidential elections are coming up but, despite political events the most important thing is the development of our country, the economy and the social sphere," Medvedev said at a meeting with Steinmeier, according to the ITAR-Tass news agency. "The event that took place in Gazprom on Tuesday is exactly an event of this scale." Putin's choice is seen in part as an effort to reassure the West, particularly business circles, about Russia's course after he leaves office. "Medvedev, whom I have know for many years, certainly is one of those Russian politicians who stand clearly for a Westward orientation and for economic modernization of the country," Steinmeier said on Germany's ZDF television.