Mounting political tensions between Russia and the EU have led to the cancelation of a major asset swap between Russia's Gazprom and Germany's BASF designed to boost BASF's upstream interests in Russia and the Russian gas giant's interests in Europe. Completion had been expected by the end of the year, after being delayed from the summer, but the German firm said last week it would no longer go ahead due to the "currently difficult political environment" (WGI Dec. 11' 13). The swap, announced two years ago, would have given BASF subsidiary Wintershall 25% plus one share in two blocks in the Urengoi gas field in West Siberia. Gazprom would have received 50% of BASF upstream subsidiary Wintershall Noordzee and, more significantly, 100% of Wingas and WIEH, now owned 50-50 by BASF and Gazprom. Wingas has 20% of the German gas market and sells into neighboring markets; subsidiary Astora owns gas storage sites and markets their capacity. WIEH and subsidiary WIEE import Russian gas and sell it on the wholesale market.
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