BELARUS NEWS AND ANALYSIS
DATE:
12/02/2009
Belarus proposes new Russian pipeline to Europe
By STEFAN NICOLA, UPI Europe Correspondent
BERLIN, Feb. 12 (UPI) -- Belarus has backed a new gas pipeline from Russia to Europe that it claims is much cheaper and easier to build than currently proposed projects to satisfy growing European energy needs. It's an effort by the former European pariah at rapprochement with Europe, which is clamoring for more energy, but by not reducing Europe's reliance on Russian gas, Belarus avoids spurning longtime patron Russia.
Belarusian Foreign Minister Sergei Martynov said Wednesday in Berlin that Russia and Europe should seriously consider building a second string to the existing Yamal-Europe pipeline.
The infrastructure for such a second string already exists (it was built with the first leg), and therefore "everything is ready to go," Martynov told a group of foreign policy experts and journalists in Berlin's posh Hotel Adlon.
The so-called Yamal-Europe 2 pipeline would have an annual capacity of roughly 23 billion cubic meters of gas and could be built within "18 to 24 months" for a cost of "$1.5 billion to $2 billion only," Martynov said. This is "significantly less than all the other pipelines," he added, a clear reference to Nord Stream, South Stream and Nabucco. The first two are Russian projects; the latter is backed by the United States and most of Western Europe, as it cuts out Russian-owned infrastructure and gas and pipeline projects.
The issue of Europe's supply security heated up during the cold New Year's dispute last month, when Russia decreased supplies to Ukraine over a pricing dispute and then turned the taps through Ukraine off altogether following claims Kiev was diverting Europe's take.
Europe imports a quarter of its natural gas from Russia, 80 percent via Ukraine, and the incident led to significant diplomatic tensions between European capitals and Moscow.
Increasing supplies has proven tough, though, with projects lacking commitments of funding and/or gas supply.
The Nabucco project would feed up to 31 billion cubic meters of gas annually to Europe beginning in 2014, according to the project consortium of Austrian, German, Turkish, Romanian, Bulgarian and Hungarian companies. However, its goal of shepherding Central Asian and Middle East gas hasn't gotten the needed guarantees from suppliers or a final financial OK from transit countries such as all-important Turkey.
Nord Stream, built by two German companies and Gazprom, would link western Siberia's gas fields directly to Germany under the Baltic Sea; the pipeline's costs have risen from $6.4 billion to some $9.5 billion. It would offer Europe 55 billion cubic meters of gas per year, and its estimated completion was pushed back by at least one year to 2011/2012.
South Stream, a Gazprom-Eni (Italy) project, would run under the Black Sea from Russia to Bulgaria, where it could branch off in several directions. It would send up to 47 billion cubic meters a year at a cost of anywhere between $15 billion and $20 billion and wouldn't deliver gas until 2013.
The Kremlin nevertheless is pushing both projects because they play into its strategy of eliminating fees and problems connected to transit countries for its energy exports. The Kremlin argues that problems, such as the bad blood between European capitals in Moscow following the Ukraine gas row, would be eliminated with Nord Stream and South Stream.
Russia's ambassador to Belarus recently ruled out building Yamal-Europe 2 before its other Europe-bound lines are completed. That does not mean this proposed second leg, which is also backed by Poland, is a mere pipe dream.
"If demand for Russian gas further rises and the other projects are delayed even more, then Yamal-Europe 2 may come back on the agenda," Stefan Meister, an expert on the region at the German Council on Foreign Relations, a Berlin-based think tank, told United Press International in a telephone interview Thursday.
Proposing Yamal-Europe 2 as a cheap and secure option for European gas imports is part of a larger westward push by Belarus.
Once branded by Washington as "Europe's last dictatorship," Belarus in recent months has tried to warm relations with the European Union.
Minsk has started to open up its economy for foreign investments and wants to increase its role as a major transit player for Russian cargo and energy. Belarus is the main transit country for Russian oil and No. 2 for gas, but there is room for more cooperation, Martynov said.
"We are interested in much more economic integration in Europe," he said.
So far, Belarus' economic success has been fueled by cheap oil and gas from Russia (the country imports virtually all its energy from its eastern neighbor). Yet since Moscow has raised prices, Minsk is looking toward Europe for additional economic possibilities, and for energy diversification.
It has launched a program to create its own power production portfolio -- it wants to build nuclear power plants and explore renewable energy sources such as biomass -- and increasingly is trying to portray itself as a secure energy transit country.
In January, at the height of the Russian-Ukrainian gas row, Minsk was able to score bonus points with the EU when it helped Europe to additional gas supplies through its pipeline system.
Martynov also proposed building in Belarus storage sites "for gas that could be exported to Europe in a crisis situation."
The EU, however, should approach all the new offers coming from Minsk with some caution, Meister told UPI.
"Belarus has economic interests; that's why they're now making all these political concessions," he said.
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