Belarus Offers Russia Pipelines for Cheap Gas

Belarus offers Russia total control of pipelines in exchange for cheap gas

The Associated Press

By YURAS KARMANAU Associated Press Writer

Belarus on Thursday offered Russia total control of its gas pipeline network in exchange for cheap gas.

Russia already owns a 50 percent stake in Beltransgaz, the holding company of the strategic transit network, under an $5 billion deal struck in 2006. Russia's Gazprom has been paying off its debt incrementally since, and Belarus has garnered significant discounts on Russian natural gas.

Belarussian President Alexander Lukashenko said in televised comments Thursday that the country is ready to cede full control of the pipelines, which also ship Russian gas to Europe, in return for Russian internal market prices on gas. Belarus is currently thought to pay more than $200 per 1,000 cubic meters.

Of the Russians, Lukashenko said: "If they say that they will sell gas to Belarus according to internal prices, then we are not against that - take the controlling stake" in Beltransgaz. It is not clear what exact stake in Beltransgaz the president was offering, and for what sum.

Russia has recently found resistance in garnering control over the sprawling pipeline network of Ukraine, despite a swing toward Moscow after recent presidential elections. Kiev maintains the transit network is too important to the country's interests to give up.

Lukashenko also raised the prospect of Russia taking control of the Mozyr Oil Refinery, one of the country's top two refineries, in return for discounts on oil imports - an idea first floated five years ago.

"We're not against it, but for decent money," Lukashenko said.

Belarus' meager economy has been struggling to cope with excise hikes on Russian oil imports imposed in February.

In recent years Russia has been trying to bring energy prices for former Soviet satellite states closer to European market levels. Observers say where Moscow delays the rate increases it expects political obedience in return.

One of the first foreign policy moves of Ukraine's new pro-Moscow leader Viktor Yanukovych was to allow Russia's Black Sea navy fleet to keep its headquarters in Ukraine's port city of Sevastopol. Kiev garnered massive discounts on gas in exchange.


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