Belarus to Invite Russian Company to Buy Stakes in Oil Transporters

Excerpt from report by Interfax-Ukraine news agency

Minsk, 1 September: The Belarusian government finds it advisable to invite the Russian company Transneft to participate in the privatization of its state oil transporting companies, the Druzhba Navapolatsk oil transport national unitary company and the Homeltransnafta Druzhba national unitary company, whose shares are to be sold in 2009, a source from the government has told the Interfax-West news agency.

He said that the Belarusian government is ready to make the offer proceeding from the steps made by Russia to diversify oil transport, in particular, in connection with the draft project to build the Baltic Pipeline System-2 (BPS-2).

Minsk notes that the implementation of the project could cut down the throughput of the Belarusian oil refineries and minimize oil transit through the territory of Belarus, which now amounts to 70m tonnes per year and is carried out in Poland's and Germany's direction. In this case, Belarus faces a threat to its energy supplies and its status of transit country, the interlocutor of the news agency underlined.

Besides, Transneft's participation in oil pipelines' privatization will allow Belarus to count on a renewal of flow through the Navapolatsk branch of the Druzhba oil pipeline in Latvia's direction which has practically not been used for transit since 2003. In Lithuania's direction, the pipeline has not been used since August 2006. Amid the decrease in oil transit through Belarus by Russia and taking into account the implementation by Russia of the BPS-2 project, the Belnaftakhim [state petrochemicals] concern has had to give up the implementation of several large-scale investment projects.

[Passage omitted: background information to the Druzhba pipeline]

The Belarusian energy security blueprint up to 2020, which was approved in September 2007, envisages the provision by 2011 of oil supplies other than Russian to an amount of 4m tonnes (20 per cent of the current volume) through ports in the Baltic and Black seas. In particular, Belarus is considering the possibility of building several links between the Belarusian part of the Druzhba pipeline and the Ukrainian oil pipeline Odessa-Brody that would allow oil to be imported from Azerbaijan. The option of Venezuelan oil supplies through the Latvian port of Ventspils to Belarusian Navapolatsk oil refinery Naftan is also being discussed. To make it possible, the reverse use of the pipeline Surgut-Unecha-Polatsk-Ventspils needs to be provided.

Russian oil supplies to Belarus will amount to 21.5m tonnes in 2008.

Originally published by Interfax-Ukraine news agency, Kiev, in Russian 0738 1 Sep 08.



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