BELARUS NEWS AND ANALYSIS

DATE:

12/10/2007

Belarus' Lukashenko Sees A Nuclear Future

Vidya Ram

LONDON - Belarussian president Alexander Lukashenko is planning to reduce his county's dependence on Russian gas by going nuclear.

Work on a nuclear power station would begin as early as next year, he told the Interfax news agency Thursday. "We have determined that the development of our own nuclear energy industry is the only way to guarantee our national security," he said.

The country is heavily dependent on Russian gas for its domestic energy needs. In August Gazprom (other-otc: OGZPY - news - people )threatened to cut Belarus's supply of gas after the country failed to pay around $456.2 million that it was owed for gas supplied in the first half year. Russia has been raising the price of gas to former Soviet republics such as Belarus, to bring them inline with Western European prices. (See: " Gazprom In Wolf's Clothing")

"Building a power plant would significant reduce Belarus' reliance on Russian gas, and from this perspective the move could be seen as directed at Russia," Alexander Kliment, an analyst at the Eurasia Group told Forbes.com.

"Belarus faces a much higher price of gas, so nuclear power looks quite competitive now," remarked Mikhail Korchemkin, managing director of Pennysylvania-based East European Gas Analysis. "Belarus has one of the least energy-efficient economies in the former Soviet Union. An energy-efficiency investment may be the best option for now."

At the same time, Russia is trying to build its role in the global nuclear power industry. In July President Vladimir Putin announced the establishment of Atomenergoprom, which will be responsible for the country's entire nuclear energy industry, from uranium extraction and reactor development. (See: " Russia's New Nuclear Behemouth")

"Belarus is precisely the frontier nuclear market that Russia is trying to build reactors for," said Kliment.

France's Areva (other-otc: ARVCF - news - people ) and Westinghouse, a subsidiary of Toshiba (other-otc: TOSBF - news - people ), currently dominate the market for nuclear reactor construction in developed companies, so Atomenergoprom will concentrate on new markets in South and East Asia, and to a lesser degree the Middle East and Africa. Its sheer size will help it build cheaply in countries where the Western companies cannot afford to tread.

Kliment said that Belarus' place in the post-Soviet space could put Russia at an advantage, when it comes to the awarding of a contract for the construction of the plant, though it was not yet clear how things will play out. He added that Russia could also be part of a joint venture, with another country such as France. "It could be that what Belarus is taking away from Russia with its right hand they are giving back with their left," he said.

Source:

http://www.forbes.com/facesscan/2007/10/11/alexander-lukashenko-belarus-face-cx_vr_1011autofacescan01.html?feed=rss_personalfinance