Belarus Looks for Gas Elsewhere
// Russian government will not make concessions for Belarus
Prime Minister Mikhail Fradkov is to hold talks with his Belarusian counterpart Sergey Sidorsky in Moscow today, before the meeting of Russia-Belarus Union Council of Ministers. Russia will insist that Belarus surrender a part of its gas transportation infrastructure to Russian enterprises. Russia will also push for higher price on natural gas. Sidorsky prepared two counter-arguments. First, Belarus is in talks with Turkmenistan to buy gas directly. Second, Belarus government has already obtained 55 percent of shares of Mozyrsky oil refinery which Gazprom wanted to buy.
A week ago, Belarus Prime Minister Sergey Sidorsky demanded to discuss natural gas issue officially. Yet, Sidorsky and Fradkov will discuss gas prices behind closed doors, two hours before the meeting of Union Council of Ministers.
Russia will push for Gazprom to acquire assets in Belarus and for simultaneously introducing market price on gas. Russian government urged to hurry up with creating Russia-Belarus joint enterprise for gas transportation.
Head of Gazprom Alexey Miller and Deputy Prime Minister of Belarus Vladimir Semashko chose Dutch bank ABN Amro as broker. The joint enterprise is to be created on the base of Beltransgaz, the cost of which fluctuated between $1 billion and $5 billion.
However, Gazprom is also interested in Mozyrsky oil refinery (it already owns 21 percent of its shares) and gas-distributing system of Beltransgaz. Alexander Lukashenka decreed to nationalize 12 percent of Mozyrsky oil refinery, de jure—to settle the arrears of Mozyrsky Oil Refinery Plus, de facto—to prevent Gazprom from overtaking its controlling stock.
What is more, Belarus held talks with Turkmenistan concerning buying natural gas “at lower prices than those offered by Gazprom.” In fact, Belarus can buy Turkmenian gas, which is considered too expensive in Gazprom, and sell it right away to Gazprom in exchange for supplies at the same price on the border with Russia. Turkmenistan counts on selling natural gas to Russia for $100 per 1,000 cubic meters.
It is unknown whether new counter-arguments of Belarus will work in its debate with Russia. A high-placed source in Russian government told Kommersant that Russia and Belarus have different models of economics, and Russia is dissatisfied that Belarus ratified nearly 40 restrictive measures for admitting Russian goods to its market, twice as much as the EU. Apparently, uniform rules for selling natural gas to CIS are now more important to Russia than economic integration.
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Fitch Ratings Agency said that a series of events of last months may lead to a new energy crisis in Europe. These events are that members of the new parliamentary coalition in Ukraine call for reconsidering gas agreements with Russia, Gazprom intends to raise gas prices for Ukraine, Turkmenistan intends to raise gas prices for Russia, and deficit of gas in Ukraine’s underground depositories. Geofrey Woodruff, director of Moscow analytical group Fitch, said that even one of these events is enough to disturb Europe about natural gas deliveries. He also said it seems a strange coincidence that all this happened on the eve of G-8 concerning energy security issues. Fitch thinks the crisis is likely to develop in autumn-winter of 2006.
Natalia Grib, Petr Netreba
All the Article in Russian as of June 28, 2006
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