BELARUS NEWS AND ANALYSIS

DATE:

15/02/2007

Belarus Hikes Russian Oil Transit Tariffs by 30%

MosNews

On Thursday, Feb. 15, Belarus announced increase in tariffs for transportation of Russian oil bound for Europe. The transit rates will increase by 31.6-34.6 percent.

According to Alexei Kostyuchenko, director of Gomeltransneft Druzhba pipeline, Belarus hopes to earn additional $50 million a year from the price hike.

Belarusian authorities say that the new tariffs match Russia's domestic oil transportation tariffs and point out that transit tariffs in neighboring states - Germany, Poland and Ukraine - are higher.

Belarus' move to raise tariffs for the transportation of Russian oil will not affect the price for European consumers, vice-president of Russia's oil pipeline monopoly Transneft Sergei Grigoryev told Itar-Tass in Moscow.

Meanwhile, Transneft has already made the decision to expand the Baltic pipeline system by building the Unecha-Primorsk pipeline bypassing Belarus. Earlier this week, Transneft president Simon Vainshtok said his company had enough financial resources for simultaneously building two new pipelines: one to the east of Russia and another to the Baltic port of Primorsk.

Both projects may be funded by credits raised on the global capital markets. At present, Transneft is working on its first Eurobond issue denominated in U.S. dollars with a redemption period of seven years, Vainshtok told a conference in London.

The new pipeline to the port of the Primorsk may supply oil bypassing Belarus. The project has already been prepared and sent to the Russian government for consideration. If necessary, the company will build this pipeline in less than 18 months, Vainshtok emphasized.

At present, 1.5 million barrels of oil a day are shipped from Primorsk.

On Wednesday, Feb. 14, the head of State Duma energy committee Valery Yazev said that initiative to build a pipeline bypassing Belarus is absolutely right in the "macroeconomic and strategic sense." "The conflict with Belarus showed that we're losing face of a stable supplier of fuel, which Russia cannot afford," he was quoted as saying.

Yazev said the construction of 950 kilometers of pipeline will cost $2 billion. The figure does not include the expenses to boost the capacity of the Primorsk oil terminal.

Source:

http://www.mosnews.com/money/2007/02/15/belarusoiltransit.shtml