BELARUS NEWS AND ANALYSIS

DATE:

29/12/2005

Gazprom tightens control of regional gas network

By ANDREA R. MIHAILESCU

UPI Energy Correspondent

NEW YORK, Dec. 29 (UPI)

Russian gas giant Gazprom strengthened control over the route used to supply European gas markets after the company secured a deal with Belarus Tuesday.

Gazprom secured the deal after several failed attempts in talks with Belarusian President Alexander Lukashenko to gain control of the state-run Beltransgaz network.

In addition to hoping to increase its influence in European energy markets, Gazprom is looking to expand its production facilities as it aims to become a major global energy player.

The company is looking to target market capitalization of approximately $250 billion to $300 billion in the next five to seven years.

"Gazprom has achieved something it wanted for several years," Eugeniusz Smolar, director of the Center for International Relations in Warsaw, was quoted as saying by the International Herald Tribune.

"As Russia's main foreign policy instrument, Gazprom wanted to weaken its dependence on Belarus as a transit country, exactly what it is trying to do with Ukraine," he said.

Under the agreement, Gazprom acquired ownership of the Belarusian section of the Yamal-Europe gas network that supplies 10 percent of Russian gas to Europe.

The amount of the deal was not released by either side.

Gazprom released in a statement Belarus is expected to charge the Russian gas giant transit fees of 75 cents per 1,000 cubic meters per 1,000 kilometers, or about 620 miles, while Belarus will pay $46.68 per 1,000 cubic meters.

Source:

http://www.upi.com/InternationalIntelligence/view.php?StoryID=20051229-035051-9878r