BELARUS NEWS AND ANALYSIS

DATE:

07/02/2007

Belarus Urges Russia to Drop Mutual Claims

Belarus' President Alexander Lukashenko proposed to Russia to drop mutual claims, Interfax reported, referring to the president's interview to Reuters that Belarus broadcasted Tuesday.

Lukashenko said they are ready to drop all claims to the RF - the financial and economic ones - should Russia act accordingly. If Russia rejects this proposal, Belarus is capable of compensating for losses incurred as a result of the surge in prices for Russia's energy supplies. "We have the price growth reserve, the increase in prices for our product. Sometimes, we used to sell it from two to three fold cheaper than similar goods," the president explained.

According to Lukashenko, Russia may lose the advantageous market of Europe if it proceeds to advancing crude deliveries via the Baltic pipelines bypassing Belarus. Instead of Russia's companies, the companies from the United States, Europe, the Arab states will come to Belarus' enterprises with their crude, cutting off Russia from the profitable market of Europe, Lukashenko asserted.

Moreover, delivering crude to Europe via the Baltic pipelines will cost twice as much for Russia, the president emphasized.

The agitation of Belarus' president probably roots in the recent statement of Semen Vainshtok, CEO of Russia's pipeline monopoly Transneft. Vainshtok officially announced the extension of the Baltic pipelines February 5, specifying that they will run bypassing Belarus from Unechi that is on the Belarus' border to Leningrad Region's Primorsk. The project budget is estimated at $2 billion to $2.5 billion.

Source:

http://www.kommersant.com/p-10050/Baltic_pipelines_extension/