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23 Jun, 2010 12:54

ROAR: Gas stops on road to Customs Union

ROAR: Gas stops on road to Customs Union

Current financial problems will not prevent Russia and Belarus from developing economic and political relations, analysts believe.

Media are commenting on the gas conflict between Russia and Belarus. Russia’s Gazprom has cut gas supplies, while Belarusian leader Aleksandr Lukashenko has ordered the halt of gas transit to Europe.

He has reportedly “borrowed money from his friends” to pay the debt to Russia, but media ask who these friends are. Ukraine, in turn, said it would help Russia to transit its gas to Europeans.

Meanwhile, Russian and Belarusian foreign ministers discussed the development of strategic relationship despite the gas row. It seemed that Sergey Lavrov and his Belarusian counterpart Sergey Martynov “would be able to forget what was happening on the economic front” and to discuss without emotions the prospects of the cooperation in different international organizations, the government’s Rossiyskaya Gazeta daily said.

The ministers actually discussed the implementation of the program of mutual actions, approved by the state council of the two states and prospects of the security treaty proposed by Russian President Dmitry Medvedev, the paper said. “However, it remained unclear if the Belarusian foreign minister was aware of Lukashenko’s decisions on the Russian transit,” it added.

As the row escalates, Europe will not be left without gas, Vesti FM radio said. Bypassing routes will be helpful, many analysts believe. “However, it will take some time to redirect gas flows,” warns Dmitry Abzalov of the Center of Political Conjuncture.

Many observers agree that the conflict will not last long. Belarus will gather money to pay its debt, and there will not be any problems with Russia’s payment for transit, analyst of the National Energy Security Fund Aleksandr Pasechnik told the radio. He is certain that the two sides will quickly resolve financial problems.

However, observers stress that the conflict has political causes. In Belarus, many analysts link the new gas problems with the Minsk’s refusal to join the Customs Union of Russia and Kazakhstan on the agreed schedule, the paper said. Belarus wants special conditions for itself in the economic union that should start working on July 1.

The Belarusian parliament on June 22 did not include the ratification of the Customs Code of the union in its agenda, Rosbalt news agency said. That means that the issue may be considered at the autumn session, and the Customs Union will be launched in July only with the participation of Russia and Kazakhstan, the agency added.

“Thus, the statements of the Belarusian officials that the issues of the Customs Union and the gas problems are not connected with each other have not been confirmed by practice, it added. Nevertheless, a compromise is likely to be found, the agency said, citing analysts. “Belarus may change its position on the Customs Union, and Russia moderates its demands in the issue of the gas supplies, it noted.

The Belarusian authorities seem to be prepared for the conflict, Rosbalt said. But analysts believe that if Russia continues to reduce gas supplies, “big Belarusian enterprises will not work without it for a long time,” the agency said. “Then Lukashenko will have to come to an agreement, but only on Moscow’s conditions,” it added.

The conflict concerns the gas transit and the European Union; the diversification of supplies and other factors are involved, Pasechnik noted. “It is a more global crisis that overshadows the issue of the Customs Union,” he said. “It is a separate issue.”

Many analysts disagree, but they think that a gas pipeline that bypasses transit countries will help to moderate their caprices, Vesti FM said. “And such a pipeline – Nord Stream – is being built in the Baltic Sea,” it added.

Meanwhile, another transit country, Ukraine, has promised its assistance to Russia. Ukrainian Prime Minister Nikolay Azarov said his country might transit an extra volume of gas to Europe through its territory. Ukraine currently transits almost 80% of gas for European customers.

Azarov and Russian Prime Minister Vladimir Putin will discuss this situation and the cooperation in the energy sphere in Moscow on June 28.

“Ukraine is watching the situation which this country experienced recently itself,” the radio station said. “Some remember that when Ukraine found itself in a similar situation, Belarus increased transit to Europe through its territory, and now Ukraine intends to do the same,” it added. At the same time, Ukrainian politicians say Kiev “is not going to interfere in the conflict of companies,” the radio noted.

For Ukraine, it is not difficult to increase transit to the volume that goes via Belarus, Vesti added. “Moreover, Ukraine is interested in this because it will get additional money for transit.”

However, there were no official requests to increase the transit from the Russian side. Despite prospects of relations with Ukraine, this variant may involve technological difficulties, Dmitry Abzalov of the Center of Political Conjuncture said. Gazprom would use it only in extraordinary circumstances, he added.

President of the Petersburg Politics fund Mikhail Vinogradov believes it is clear how the conflict will end: “If the topic of the union with Belarus is principal for Russia, it will make concessions as in the past during its disagreements over gas with Ukraine,” he told Actualcomment.ru.

But it might be also important for Russia to demonstrate to Minsk that Moscow’s movement toward Kiev changes the situation, the analyst assumed. That makes Russia less compliant in its relations with Minsk, and it may sacrifice the fairly vague project of the Customs Union, he said. “In this case, Belarus will likely to have problems,” he argued.

The Belarusian leader said Russia’s debt for transit is bigger than Belarus’s debt for gas, and suggested solving the problem on a net basis. Gazprom is insisting that it cannot pay Belarus for transit for “technical reasons” caused by Belarus’ transit company, Beltransgaz, Vremya Novostey daily wrote.

“The two parties have been discussing tariffs for several months, but now the situation has gone out of control and has grown into a gas war,” the paper said. “Moscow has decided to use the debt to exert pressure on Lukashenko, who is not ready to sign agreements on the Customs Union until he gets Russian inner price for oil and gas,” it said.

“Minsk, in its turn, has resorted to a full-scale confrontation because it is easier to fight against suppliers in summer than during the heating season,” the paper said. “But to all appearances, Lukashenko is ready to continue discussion about the Customs Union,” it added.

In any case, “he continued it with pleasure in public” and said that Russia was not fair with Minsk, referring to oil duties, the paper said. And it quoted Lukashenko as saying: “We are building the Customs Union.”

Sergey Borisov,
Russian Opinion and Analysis Review, RT