BELARUS NEWS AND ANALYSIS

DATE:

15/02/2007

Belarus hikes tariffs for Russian oil transportation

MINSK, February 15 (Itar-Tass) - Belarus imposed from Thursday higher tariffs for the transportation of Russian oil through the republic's trunk pipelines. The rates will increase by 31.6 to 34.6 percent.

On the Unecha-Mozyr-Adamovo stretch, which supplies fuel to Poland and Germany, tariffs were raised from 2.6 to 3.5 dollars per tonne of oil.

Alexei Kostyuchenko, Director of the Gomeltransneft Druzhba, said Belarus is hoping to earn an additional 50 million dollars a year by hiking oil transportation rates for Russia.

Minsk explained the hikes by the necessity to revise the transit rates, which have remained unchanged since January 1, 2006. It underlined that the new Belarussian tariffs match those inside Russia and that in neighboring states -- Germany, Poland and Ukraine - they are higher than in Belarus.

Belarus' move to raise tariffs for the transportation of Russian oil will not affect the price for European consumers, vice-president of Russia's Transneft oil transportation company Sergei Grigoryev told Itar-Tass in Moscow.

The company has already made the decision to expand the Baltic pipeline system by building the Unecha-Primorsk pipeline bypassing Belarus.

Earlier this week, Transneft head Semyon Vainshtok said his company had enough financial resources for simultaneously building two new pipelines: one to the east of Russia and another to the Baltic port of Primorsk.

Both projects may be funded by borrowings on world markets of private capital. At present, Transneft is working on its first Eurobond issue denominated in US dollars with a redemption period of seven years, Vainshtok told a conference in London on problems of the world oil market.

The new pipeline to the port of the Primorsk may supply oil bypassing Belarus. The project has already been prepared and sent to the Russian government for consideration. If necessary, the company will build this pipeline in less than 18 months, Vainshtok emphasized.

At present, 1.5 million barrels of oil a day are shipped from Primorsk. If a new pipeline is built, pumping Russian oil through Latvia and Estonia will stop making sense, British specialists said.

Transneft has already proven that it can implement large projects in a tight timeframe.

On Wednesday, head of the committee on energy under the State Duma lower house of the Russian parliament Valery Yazev called the initiative absolutely right in the "macroeconomic and strategic sense." "The conflict with Belarus showed that we're losing face of a stable supplier of fuel, which Russia cannot afford," he underlined.

Yazev said the construction of 950 kilometers of pipeline will cost 2 billion dollars. The figure dose not include the expenses to boost the capacity of the Primorsk oil terminal.

Source:

http://www.itar-tass.com/eng/level2.html?NewsID=11253835&PageNum=0