Gazprom opts for German duo

Russian gas giant Gazprom said today that German players E.ON and BASF would be its only partners in the Baltic Sea gas pipeline venture.

"Today there is an understanding that the financial and shareholding structure is self-sufficient and that the project can be implemented," Gazprom chief Alexei Miller told a news conference.

Gazprom said earlier companies including BP, Dutch gas player Gasunie, Gaz de France and British pipeline company Transco had expressed interest in the project.

The comment came as the Baltic pipeline venture - 51% owned by Gazprom and with 49% equally split between the two German players - held its first shareholders' committee and elected former German chancellor Gerhard Schroeder to chair it.

The committee has, however, failed to agree on the financing of the project, which could cost between $4 billion and $6 billion. It will meet again on 4 June.

The pipeline should be pumping up to 55 billion cubic metres a year of Siberian gas through the Baltic Sea from Russia to Germany and onwards to western Europe from the middle of the next decade.

Schroeder came under fierce criticism from opposition politicians in Germany and some European Union officials over his Russian job. Critics said he moved with unseemly haste to take a position that blurs the line between politics and business.

It has also revived criticism that Schroeder's close friendship with Russian President Vladimir Putin led him to overlook abuses of democracy and human rights in Russia while he was in office.