BELARUS NEWS AND ANALYSIS

DATE:

18/05/2006

Belarus Will Trade Beltransgaz for Production Assets

First Deputy Prime Minister of Belarus Vladimir Semashko was quoted by the ITAR-TASS agency as saying "We are prepared to exchange assets, to place 50 percent of Beltransgaz in a Belarusian-Russian independent gas transport enterprise and receive assets in Gazprom's gas producing structures that would allow us to produce 10-12 billion cubic meters of natural gas per year in Russia." That way, Belarus would preserve its cheap gas supply in the face of Gazprom's intentions of sharply raising the price of gas to that country.

This is not the first time the offer has come from Belarus. Belarusian presidential representative Vasily Dolgolev announced that that deal was ready after the negotiations between Belarusian President Alexander Lukashenko and Russian President Vladimir Putin last month. Semashko claims that negotiations on that topic are underway. Press secretary of the head of Gazprom Sergey Kupriyanov told Kommersant that "We have received no official proposals for the exchange of assets. We found out about their existence yesterday from an information agency."

Belarus now pays $46.68 per cu. m. of Russian gas. That is half the price Ukraine pays and a third of the price the Baltic countries pay. Gazprom has announced that it will charge Belarus a market price beginning in 2007, mentioning $145 per cu. m. Semashko repeated yesterday that Belarus is prepared to pay only an 11-percent increase in gas prices, calling the sharp price hike for "an ally" incorrect. The Belarusian proposal is structurally similar to the agreement Gazprom has reached with the German BASF to trade shares in its Severneftegazprom producer for a larger chunk of Wingas, BASF's gas trader. Gazprom is nonetheless not allowing its foreign partner direct access to gas production but only participation in an independent enterprise in which Gazprom would retain the controlling package. Judging from the statements of Belarusian officials, that country is interested in receiving a Russian gas field, for which there have no precedents.

Source:

http://www.kommersant.com/page.asp?idr=529&id=674476