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. Last Updated: 07/27/2016

Siemens Signs Arctic Gas Deal

Gazprom and Siemens, Germany's biggest engineering company, will expand their cooperation to work on developing an Arctic gas field and a pipeline across the Baltic Sea to expand Russia's gas exports to Europe.

The agreement was signed by Gazprom CEO Alexei Miller and Siemens CEO Klaus Kleinfeld in Munich, Gazprom said Wednesday in a statement.

The companies will work on the North Europe pipeline, a $5.7 billion link between Russia and Germany to carry gas along the floor of the Baltic Sea, and other unspecified pipelines outside Russia.

Gazprom is seeking to attract international companies as partners in the North Europe pipeline project. Gazprom and E.ON have reached a preliminary agreement. Wintershall, BP, Royal Dutch/Shell, Total, and Fortum have expressed interest, Gazprom has said. The pipeline is likely to start operating in 2010, Miller said last month, three years later than first planned.

Gazprom and Siemens also agreed to cooperate on developing the Yuzhno-Russkoye gas field, in the Arctic part of western Siberia.

The costs to develop the field, whose proven and probable reserves of 590 billion cubic meters of gas exceed Gazprom's current annual output, may run close to 1 billion euros ($1.3 billion).