BELARUS NEWS AND ANALYSIS

DATE:

20/01/2011

FACTBOX - Energy disputes between Russia and Belarus/Ukraine

Jan 20 (Reuters) - Russian Prime Minister Vladimir Putin is to meet his Belarussian counterpart on Thursday to resolve a row that has already cut oil product exports to Europe and contributed to a sharp rise in diesel prices.

Moscow has often had stormy relations with Belarus and Ukraine over oil and gas supplies - here are some details:

* BELARUS:

-- Russian energy giant Gazprom has traditionally charged Minsk below market prices for oil in what analysts say reflects Moscow's desire to maintain an ally on its Western flank. In recent years Russia has sought prices more in line with booming international market prices.

-- Low gas prices and financial help from Moscow are crucial for Belarussian President Alexander Lukashenko's efforts to keep afloat the economy.

-- The Druzhba (Friendship) pipeline also carries Russian oil through Ukraine and Belarus to Europe.

-- The Belarussian spur of the Druzhba pipeline supplies about one-tenth of Europe's shipments from west Siberia, going to Poland and Germany.

-- During a pricing dispute with Russia in January 2007, oil shipments through Belarus were halted for three days.

-- In January 2010, Russia and Belarus signed a new oil supply deal, resolving a month-long row during which they managed to avoid major supply cuts to Europe.

-- Last June Russia cut gas supplies to Belarus by 15 percent pressing its neighbour to pay a $192 million debt and raising the possibility of a reduction in flows to Europe.

-- Relations between the two have soured since they failed to agree on unified customs rules and Belarus gave refuge to ousted Kyrgyz President Kurmanbek Bakiyev, despite Moscow's support for the new Kyrgyz leadership.

* UKRAINE:

-- Kiev and Moscow have a long history of gas pricing disputes and they first came to world attention in January 2006, when supplies to western European customers were halted. A dispute over gas prices -- Ukraine then paid just $50 per 1,000 cubic metres, Gazprom wanted to charge $230 -- was complicated by accusations of corruption in the energy sector from then Prime Minister Yulia Tymoshenko.

-- Gazprom cut off supplies on Jan. 1 2006, but turned them on again a day later. European consumers complained their supplies had been hit. Gazprom accused Ukraine of stealing gas from export pipelines and Kiev denied any such move.

-- Ukraine agreed to a price of $95 per tcm and the introduction of intermediary RosUkrEnergo, which soon became a source of conflict over future gas agreements.

-- In March 2008, Russia halved supplies to Ukraine in another row, but quickly reached agreement to restore the flows without affecting European customers.

-- In January 2009, in yet another pricing row between Moscow and Kiev resulted in a stoppage of Russian gas flows to Europe for about two weeks, further tarnishing Russia's image as a reliable exporter and spurring a European quest for new suppliers.

-- In April 2010, Russia and Ukraine clinched a new pricing deal, under which Ukraine would pay for 2010 alone about $3 billion less than previously agreed. The deal was in exchange for an extension of a lease for the Russian navy in a Ukrainian Black Sea port.

-- Russia's gas export monopoly Gazprom supplies Europe with a quarter of its gas needs and around 80 percent of this passes through pipelines across Ukraine. (Additional Writing by David Cutler, London Editorial Reference Unit;)

Source:

http://af.reuters.com/article/energyOilNews/idAFLDE70J0P420110120




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