2.3 – Joint ventures and associated companies

BASF has shareholdings in two material joint ventures. BASF-YPC Company Ltd., Nanjing, China, is operated by BASF together with its partner Sinopec at the Verbund site in Nanjing. BASF’s share is 50%.

W & G Infrastruktur Finanzierungs-GmbH, Kassel, Germany, a joint venture between BASF and Gazprom for the bundling of the regulated gas transportation business (BASF interest: 50%), was established in August 2017. Effective November 30, 2017, GASCADE Gastransport GmbH, Kassel, Germany, which was reported for as a material associated company in the previous year, and NEL Gastransport GmbH, Kassel, Germany, which was reported for as a non-material associated company in the previous year, were transferred from W & G Transport Holding GmbH to W & G Infrastruktur Finanzierungs-GmbH.

Additionally, W & G Infrastruktur Finanzierungs-GmbH has become party to the financing arrangement previously between WIGA Transport Beteiligungs-GmbH & Co. KG and an international banking consortium; besides WIGA Transport Beteiligungs-GmbH & Co. KG, W & G Infrastruktur Finanzierungs-GmbH functions as a further debtor and assumed €925 million of financial liabilities previously held by WIGA Transport Beteiligungs-GmbH & Co. KG against a transfer of loan receivables to GASCADE Gastransport GmbH and NEL Gastransport GmbH as well as cash. This was deposited in BASF’s cash pool. In doing so, W & G Infrastruktur Finanzierungs-GmbH effectively took over the financing function for both of these companies operating in the regulated gas transportation business.

Non-material joint ventures accounted for using the equity method particularly comprise:

• Wintershall Noordzee B.V., Rijswijk, Netherlands, which is operated jointly with Gazprom (BASF interest: 50%);
• N.E. Chemcat Corporation, Tokyo, Japan, which is operated jointly with the partner Sumitomo Metal Mining Co. Ltd. (BASF interest: 50%);
• Heesung Catalysts Corporation, Seoul, South Korea, which is operated jointly with the partner Heesung (BASF interest: 50%).

A material associated company accounted for using the equity method is Joint Stock Company Achim Trading, Moscow, Russia (BASF interest: 18.01%, economic share: 25.01%), which together with Gazprom, will market the output from blocks IV and V of the Achimov formation. The investment value in the amount of €768 million remained unchanged in comparison with the previous year and arose from the fair value measurement as a result of the asset swap with Gazprom on September 30, 2015. The company’s economic activities will commence in 2020 with the scheduled start of production from blocks IV and V. Therefore, there is no relevant financial information to report according to IFRS 12 in 2017.

Non-material associated companies accounted for using the equity method particularly comprise:

• OAO Severneftegazprom, Krasnoselkup, Russia (BASF interest: 25%, economic share: 35%)
• Nord Stream AG, Zug, Switzerland, was classified as an associated company even though BASF only has a 15.5% share, as it can exercise significant influence over the company due to the fact that its approval is required for certain relevant board resolutions.
• Stahl Lux 2 S.A., Luxembourg (BASF interest: 16.6%) was classified as an associated company even though BASF only has a 16.6% share, as it can exercise significant influence over the company due to the fact that its approval is required for certain relevant board resolutions.
• Wintershall AG, Kassel, Germany, which operates Libyan exploration and production activities together with Gazprom Libyen Verwaltungs GmbH (BASF interest: 51%). Despite an investment of 51%, BASF does not exercise control according to IFRS 10, as contractual arrangements with the Libyan government strictly limit influence on variable returns after income taxes.