In the presence of French President Nicolas Sarkozy and his Russian counterpart Dmitry Medvedev, GDF Suez and Gazprom signed an agreement in Paris yesterday (1 March) formalising the entry of the French utility to the Nord Stream pipeline project.
The memorandum was signed by Gazprom's management committee chairman Alexey Miller and GDF Suez chief Gérard Mestrallet, according to a statement from the companies.
The two parties agreed to start discussions on supplying up to 1.5 billion cubic metres of additional gas per year to GDF Suez from 2015. The supplies will be shipped via the planned Nord Stream pipeline.
Under the deal, GDF Suez will become a shareholder of Nord Stream AG and hold 9% of the company's capital before construction of the Baltic Sea pipeline starts next month (see 'Background').
"By entering Nord Stream and increasing its gas purchase from Russia, GDF Suez aims at contributing to Europe's security of supply, including North West Europe, where the group is one the major power producers and holds a large portfolio of final power and gas customers," Mestrallet said in the statement.
However, the Russian press reveals difficulties at GDF during the negotiations in acquiring shares in Nord Stream. The French utility is expected to buy 4.5% of the shares of each of the pipeline's German partners, BASF/Wintershall and E.ON Ruhrgas. However, according to a source quoted by Moscow daily Kommersant, no agreement has been reached with Ruhrgas regarding the price of the package.
The source explained that when a similar package was bought by Dutch gas infrastructure company Gasunie last year, the price of the shares had been much lower, as there was more uncertainty surrounding the project at the time.
Additionally, GDF Suez is reportedly requesting that its Russian partners have more say in the Nord Stream project than Gasunie. In particular, the French utility wants to participate in decision-making on smaller gas sale contracts than previously envisaged for 9% participation in the consortium, the source adds.