President Vladimir Putin announced the terms of the deal - the first time a foreign company has been granted access to a strategic gas deposit in Russia - at a news conference in the West Siberian oil city of Tomsk, where he is meeting with German Chancellor Angela Merkel.
He hailed BASF's decision to offer some of its assets to Gazprom in exchange for an increased stake in the Gazprom-operated Yuzhno-Russkoye oil and gas field.
"BASF has offered Gazprom an opportunity to share its assets involved in natural gas transportation and distribution in Germany," Putin said. "Everything has been done with mutual interests in mind. We will, of course, pay back in kind to those of our colleagues who work in such a mode."
With recoverable reserves estimated at more than 600 billion cubic meters, the Yuzhno-Russkoye deposit, in West Siberia's Yamal-Nenets Autonomous Area, will be the main source of natural gas for export via the North European Gas Pipeline (NEGP), a $10.5-bln Gazprom-managed project to supply Western Europe with gas via a pipeline across the floor of the Baltic Sea.
Russia currently supplies about a quarter of Europe's gas, and 30% of Germany's. At current export rates to Germany of 40 billion cubic meters, the deposit will have enough gas for 15 years of steady supply. Production is slated to begin in 2008.
Under the asset-swap deal, Gazprom will increase its interest in the companies' Wingaz joint venture to 50% minus 1 share and gain a stake in Wintershall, a BASF subsidiary that owns hydrocarbon exploration and production assets in Libya.
The deal will give Wintershall 25% minus 1 voting shares and 10% of non-voting shares in Severneftegazprom, raising BASF's stake in the Yuzhno-Russkoye deposit, operated by this Gazprom subsidiary, to 35% minus one share.
"Our cooperation with BASF is unique, and covers the entire chain of cost creation - from exploration and production of natural gas in West Siberia and its transportation along the North European Pipeline to distribution via a joint pipeline network in Germany and other countries of Europe," Gazprom CEO Alexei Miller said. "This opens up opportunities for reliable, long-term Russian gas supplies into Europe on competitive terms."
Gazprom and BASF also agreed to set up a joint venture, Wingaz Europa, to sell natural gas in Europe.
