BELARUS NEWS AND ANALYSIS

DATE:

19/10/2007

Russian PM revives idea of new gas line via Belarus to Europe; Azerbaijan supports Nabucco

The Associated Press

MINSK, Belarus: Russian Prime Minister Viktor Zubkov said Friday that Moscow should seriously consider building a second strand of a pipeline that carries natural gas from Russia to European Union customers via Belarus, a project seen as an alternative to a planned pipeline to Germany under the Baltic Sea.

In another front in the competition over westbound transport routes for the rich energy resources of the former Soviet Union, Azerbaijan's energy minister said his country supports a project for a pipeline that would transport gas from the Caspian Sea region to Europe, bypassing Russia.

In his first trip outside Russia since he took office last month, Zubkov revived the idea of building a second strand of the Yamal-Europe pipeline, a major route for the supply of gas controlled by Russian monopoly OAO Gazprom to the EU.

"It would probably make sense to return once again to the question of building a second strand," Zubkov told reporters. The government in Belarus, which battled with Moscow late last year over a gas price increase that hurt its economy, has offered Russia incentives for reviving plans for a second strand of the pipeline.

Gazprom has faced increased cost estimates for projects such as Nord Stream, a pipeline under the Baltic Sea that would bypass Belarus and Poland and make a second strand of Yamal-Europe unnecessary. Analysts have long argued that a second strand of Yamal-Europe would cost far less than Nord Stream.

Zubkov, however, did not indicate whether Russia was considering a second strand as a replacement for Nord Stream, a German-Russian project that is to carry Siberian gas directly to the German market - the largest consumer of Russian gas in Europe. Construction is planned to start in 2010.

The existing Yamal-Europe pipeline has an annual capacity of 33 billion cubic meters of natural gas. Gazprom supplies a quarter of the gas Europe uses, and over 20 percent of Russia's gas supplies to Europe go through Belarus.

After the dispute with Belarus, Russian officials stressed the need to diversify energy export routes. The scrap also deepened concerns in the EU - already spooked by a similar showdown between Russia and Ukraine that briefly decreased supplies to Europe a year earlier - about Russia's reliability as an energy supplier.

In Azerbaijan, Energy Minister Natik Aliyev said the state oil company SOCAR is in talks on the prospective Nabucco pipeline - seen as key to Europe's efforts to lessen its dependence on Russian energy - and supports the EU-backed project to pump gas from the Caspian region to Austria and onwards.

"The Azerbaijani authorities support this project and attach great importance to it," Aliyev said at a German-Azerbaijani energy forum. Azerbaijan hopes to have 30 billion to 50 billion cubic meters of gas to export annually by 2020, he said, "but we need the appropriate infrastructure, new pipelines."

Aliyev stressed that Azerbaijan could help ease Germany's reliance on Russian gas. German Economy Minister Michael Glos said Germany hopes Nabucco would supply Germany with 5 billion cubic meters of gas a year.

Associated Press Writer Aida Sultanova in Baku, Azerbaijan, contributed to this report.

Source:

http://www.iht.com/articles/ap/2007/10/19/business/EU-FIN-Belarus-Azerbaijan-Gas-Pipelines.php