Russia’s Gazprom Plays Hardball in Belarus
The on-again-off-again saga of Russian natural gas to Belarus has, for 10 days at least, switched back to the ‘on’ position.
According to a temporary contract sealed by Trans Nafta and Beltransgaz today, 640 mcm of gas- 10 days’ worth- will be made available to Russia’s struggling neighbor. In addition to this amount, transit gas through Belarus will resume to Russia’s Kaliningrad Region, Lithuania, Germany and Poland, according to Gazprom officials.The Russian company enjoys a monopoly over Belarus’ gas supply, and the chronic failure to come to an agreement with the country over prices has let the company cut off supply at will and flex its considerable muscle. Since 1 January, the gas has supply been cut several times, most recently on Thursday, when a temporary contract inked on 12 February expired. Gazprom also charged that illegal “siphoning” was taking place on the Belarusian side of gas meant to be transiting to the West.
Before that, on 12 February, Gazprom ceased shipping gas to Belarus, but the independent Russian gas producer TransNafta was allowed to continue, according to another temporary contract. A last-ditch meeting on 16 February between Beltransgaz General Director Pyotr Petukh and Gazprom Board Chairman Alexei Miller proved futile, and Gazprom officials on Thursday ended TransNafta’s operations. Nevertheless, they reassured that transit gas for the West would be redirected in ‘other ways,’ through existing pipelines in Ukraine and elsewhere.
However, that said, it seemed obvious that the two sparring parties would come to an agreement quickly. Just before the gas was switched back on, Interfax reported:
“…Gazprom will not be able to keep gas supplies at their regular level without using the Belarus route for more than three days, an official of a Western European gas company told Interfax on condition of anonymity.”
According to the same official, “…Western purchasers of Russian gas deal directly with Gazprom, rather than with Beltransgaz, the Belarussian gas transport company,” and “…will demand that Gazprom, rather than Belarus, pay damages.”
Russian independent gas supplier Itera, which halted supplies on the 12th, claims it is owed $23.5 million. TransNafta, the other independent supplier, is owed $12.1 million.
Until now, Russian gas had been sold in Belarus at the subsidized price of $30 per 1,000 cubic meters (35,000 cubic feet). Gazprom, however, is looking to charge $50, the same rate as it gets in other former Soviet republics. Gazprom said Tuesday that if Belarus wants to keep rates at their current subsidized level, the gas giant will need to take 50 percent of the Belarusian gas pipeline network.
However, according to AFP,
“…Minsk has refused to allow Gazprom a controlling stake in Beltransgaz, which is now being privatized and is a major conduit for Russian gas exports to Western Europe. The two sides are also haggling over the price. Minsk values the company at five billion dollars, while Gazprom insists it is worth only one billion.”
Russia may be Belarus’ closest ally, but this hasn’t stopped the Belarusians from crying foul over Gazprom’s actions: “Belarus is almost totally dependent on Russian gas for its energy supplies and has accused Moscow of trying to use blackmail to grab control of its gas transport network.”
Similar charges have been leveled against Russian companies active in other former Soviet states. In Georgia, where irregular wintertime gas cut-offs have been the norm for years, charges that the government was too tolerant of allowing a similar Russian monopoly helped lead to the defeat of President Eduard Shevardnadze in November. Now, the new Georgian government is trying to win back Russia’s affections- and keep its historically vital gas supply in good working order.
Russia and Belarus usually have a fairly good working partnership. The former provides a diplomatic shield against frequent Western attacks on Belarus and its president, Aleksandar Lukashenko. However, in this case Lukashenko showed great perturbation with Belarus’ big brother to the east, calling the cut-off an “act of terrorism”:
“‘…We must conclude the treaty on Putin’s terms. If Putin wants, let’s collect money from children, medicine, from those who decayed in the ditches during World War II,’ he said acidly.
He called on the government to review all its treaties with Russia, presumably with an eye to retaliation.
‘What, Russia doesn’t enjoy privileged conditions in Belarus? In transit, its military bases, airspace and so on?,’ Lukashenko said in comments aired on state television.’”
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