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Main | Archive | Issue 2/2008

Password: Interdependence
Column: Under The Sign Of Mercury

Prince Pyotr Dmitriyevich Golitsin (Piotr Galitzine), Chief Representative of the German chemical company BASF in Russia, granted an interview to Diplomats Editor in Chief Yu.V. Tavrovsky.

Your Grace, what do you make of the present state of German-Russian economic cooperation?
I think this cooperation is as close as never before and keeps gaining momentum. In the energy matters that are close to me our cooperation is developing at an impressive pace due to mutual interest and, Id even say, to interdependence. If one side has built and continues building oil and gas pipelines worth over $1 million per kilometer and the other side takes this product in immense quantities, it is only natural that both sides depend on each other. And it seems to me that exactly this interdependence guarantees long-term energy security.

We can state with pride and pleasure that BASF is making a tangible contribution to German-Russian economic cooperation. BASF has been cooperating with Gazprom for 18 years now. All had begun with trading in Russian natural gas in Germany. Today, we are marketing and distributing this Russian gas all over Europe. Moreover, we jointly produce and transport this gas, for which purpose we have teamed up to construct the North European Gas Pipeline (NEGP).

How is the NEGP project being implemented from the BASF point of view?
Onshore work in Russia has been going for a year now. A branch line is under construction that goes from Vologda toward the northwest, passes near St. Petersburg and ends up at Vyborg. As for the undersea portion of the gas pipeline, talks with the countries of the Baltic Sea basin are still underway.

The North European Gas Pipeline is the future, even if is the near future. And what about last years key accomplishments of BASF in Russia?
I think the signing and coming into effect of a very large and ambitious project between Sibur, one of the leaders of the Russian petrochemical branch and part of the Gazprom group, and Solvin that, in turn, is a joint venture between BASF and the Belgian company Solvey, has been our widest-ranging accomplishment yet. Large-scale agreements and contracts were signed in Nizhny Novgorod in the presence of Governor Shantsev. These accords provide for construction from scratch of a huge complex in the town of Kstovo designed to produce initially 330,000 tons of polyvinylchloride (PVC) and eventually 500,000 tons of PVC a year. The same facility will also manufacture 50,000 tons of HCL, a liquid PVC product, as well as about 750,000 tons of soda. The total investment amount will be 650 million.

Mr. Galitzine, what is now the geographic distribution of the BASF presence in Russia?
Look at this map.. The great majority of color pins on it are, of course, in the countrys central part as well as west to the Urals. Simultaneously two of our major oil and gas fields are located in Western Siberia. Both projects are situated in the area of Novy Urengoi: one is the Achimgas joint venture and the other the Yuzhnorusskoye field that has been put into operation quite recently. This launch was a historical moment. Not only will the gas produced there be transported by thy North European Gas Pipeline. Very important is also the fact that Wintershall, a daughter company of BASF, exchanged shares with Gazproms daughter company, and on December 18, 2007 a relevant deal was concluded in Moscow in the presence of First Deputy Prime Minister of the RF Dmitry Medvedev and the German Minister Frank-Walter Steinmeier. There are other two regions, Altai and the Far East, which are of great interest to us from the point of view of developing the marketing of plant protection agents. We started with setting up agricultural centers there: we lease a portion of a large farm, grow the same plants that are grown by its owners, but then we use our products to show a difference in the final analysis.

Do you like working with your Russian partners?
Very much so. In 2007, the volume of our cooperation with Russian partners will be in excess of 500 million. We have more than doubled our turnover in the last three years. We dont see any political, economic or other systemic threats to this mutually beneficial interaction in the foreseeable future.


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