BELARUS NEWS AND ANALYSIS

DATE:

21/05/2007

Analyst on purchase of Beltransgaz by Gazprom: Belarus is unreliable partner, but one cannot move it away from the map

"In case, Gazprom's deal to purchase Beltransgaz is completed, it will be hard to turn it round," MDM Bank analyst Andrei Gromadin told REGNUM.

"The deal is profitable to Gazprom: in order to make up for the asset, it will be enough to raise gas price for Belarus by $30 per 1,000 cubic meters. And the price will increase even higher, up to the level equal with Europe except for export duty and transport expenditures," the analyst noted.

"Having 50% of Beltransgaz, Gazprom is decreasing its operational and financial risks. It will be able to control its operational activity, prevent from accidents and invest in development of the pipeline. If Belarus decides to raise the gas prices, Gazprom will have a half of the profit and will be able to cut down its expenditures," Gromadin supposes.

Answering a question of a REGNUM correspondent about possible "hidden dangers" of the deal, Gromadin said that everything would depend upon Belarusian-Russian relations. "Belarus has not proven itself as a reliable partner, but one cannot move it away in the map: anyway, most Russian oil will be exported via it," the analyst concluded.

On May 18, Gazprom and Belarusian State Property Committee signed a contract on Gazprom purchasing 50% of Beltransgaz shares for $2.5 bln. Gazprom is expected to pay $625 bln within 20 days, after that it will receive 12.5% of shares. The rest 37.5% will be purchased in equal parts within 2008-2010. As a result, the Russian gas giant will have access to main pipelines, which are transporting quarter of the Russian gas.

Source:

http://www.regnum.ru/english/830550.html

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