BELARUS NEWS AND ANALYSIS

DATE:

08/01/2007

Major Russian oil pipe to Europe shut off

Trade dispute between Russian and Belarus thought to be cause; reminiscent of previous disruption through Ukraine.

MOSCOW (Reuters) -- A Russian oil pipeline carrying supplies across Belarus to Poland and Germany stopped pumping overnight in a trade dispute between Moscow and Minsk that could lead to fuel shortages across Europe.

Only last week the ex-Soviet states promised to put their argument to one side and keep providing oil to the rest of Europe whose refiners are heavily reliant on Russian supplies to make winter heating oil and other products.

The feuding grew more intense on Sunday when Belarus subpoenaed the head of Russian pipeline monopoly Transneft and Russia demanded an end to oil transit fees imposed by Belarus.

"Oil supplies via the Druzhba [Friendship] pipeline to Poland and Germany were halted overnight. We sent a letter to Belarus asking for explanations," said Tomasz Zakrzewski, a spokesman for Polish pipeline operator PERN.

Germany confirmed the news. Officials said they were in the dark as to the reason for the stoppage. Plants in east Germany are most vulnerable, including Total's Leuna refinery.

"There is no indication as to the causes. We remain in contact and are looking into the causes," a spokesman for the Economy Ministry told a regular government news conference.

Poland's Deputy Economy Minister Piotr Naimski told TV channel TVN24: "As far as we know it has to do with a dispute between the Russian Federation and Belarus over export duties on the one hand and transport fees on the other."

Russia's alliance with Belarus has been shaken by Moscow's recent decisions to impose duties on oil sales to its neighbor, double gas prices and ban imports of Belarusian sugar.

Belarusian President Alexander Lukashenko - branded Europe's last dictator by Washington - fought back last week by slapping a transit fee on Russian oil pumped via Belarus.

Russia's Interfax news agency quoted a Belarusian official saying Ukraine had also been cut off. He added the transit of oil may resume later on Monday.

Ongoing feud

Russian oil pipeline monopoly Transneft accused Belarus of stealing crude from the Druzhba line and said it would do its utmost to reroute supplies to its European customers.

Belarus rejected the charge, which was reminiscent of accusations leveled against Ukraine in January 2005 when Russian gas supplies to Europe were halted in a price dispute between Moscow and Kiev.

"Transneft is at this moment doing all it can to raise exports via alternative routes to its customers in western Europe," Transneft head Semyon Vainshtok was quoted by RIA Novosti news agency as saying.

The Druzhba, or Friendship, pipeline to Central Europe is one of the world's biggest.

Belarus trans-shipped 90 million tonnes (1.8 million barrels per day) of Russian oil last year through the main Druzhba line to Poland and Germany, and through a southern spur to Slovakia, the Czech Republic and Hungary.

A spokesman for the Czech Industry and Trade Ministry said oil flows to the Czech Republic had not been interrupted.

On Saturday, Belarus subpoenaed the head of Moscow's oil pipeline monopoly Transneft to appear in court over administrative charges of illegal oil transits to third states.

Russia's Economy Ministry meanwhile handed a note to the Belarusian ambassador to Moscow, urging Minsk to scrap fees on Russian crude transits, which it said were threatening stable supplies to consumers in Western and Eastern Europe.

The Druzhba pipeline splits into two spurs with the bigger one, the northern leg, going to Poland and to Germany.

The northern leg pumps crude to refineries in Poland and Germany and for re-exports from the Polish Baltic Sea port of Gdansk. The pipeline's southern leg travels across Ukraine to Hungary, Slovakia and the Czech Republic.

Source:

http://money.cnn.com/2007/01/08/news/international/belarus.reut/?postversion=2007010814