BELARUS NEWS AND ANALYSIS

DATE:

02/02/2007

Belarus expects to get $5 mln a year from pipeline land rent

MINSK, February 2 (RIA Novosti) - A decree is pending in Belarus setting the rent for land beneath the natural gas and oil pipelines crossing its territory at $5 million a year, a government official said Friday.

State Property Management Committee Chairman Georgy Kuznetsov said the rent will only be charged on land plots that are otherwise unused, including forest land.

Belarusian President Alexander Lukashenko said earlier Minsk would demand that Moscow pay rent for the Belarusian land under pipelines it uses to pump oil and gas to Europe.

Russia suspended crude supplies via a major pipeline running through Belarus to Europe in early January after Belarus imposed a transit fee on Russia's Europe-bound crude in retaliation for Moscow's move to hike the gas price for its Western neighbor and impose an oil export duty.

Lukashenko accused Russia, whose Urals crude blend is currently trading at around $51 a barrel on world markets, of seeking to charge Belarus oil prices above international levels.

"That is unacceptable," he said. "I have given direct instructions to a delegation conducting negotiations that companies offering such prices will have to pay additional duties when pumping oil to Europe."

"We must compensate our losses. We are not going to argue with them because it is their oil, but we will pump our oil without losses," he said.

The energy row between the two nations was resolved after Belarus relented and lifted its transit duty, and Russia later cut its export duty from $180.7 to $53 per metric ton, avoiding potentially crippling economic consequences for its neighbor, which relies heavily on receipts from refining and re-exporting Russian oil.

The standoff, which drew parallels with an energy row with Ukraine involving natural gas this time last year, triggered further accusations in Europe that Russia is using hydrocarbons as a political tool, and discussions on the need to diversify energy sources.

Source:

http://en.rian.ru/world/20070202/60113139.html