BELARUS NEWS AND ANALYSIS

DATE:

25/12/2006

Russia's Gazprom to Form JV with Belarus Gas Transit Monopoly

MosNews

Belarusian Energy Minister Nikolai Ozerets announced on Sunday, Dec. 24, that Russia's state-controlled gas monopoly Gazprom and the country's gas transit monopoly Beltransgaz will create a joint venture next year.

"The process of joint venture's creation will be stretched out over the whole first quarter of 2007," Ozerets was quoted by RIA Novosti as saying.

He added that evaluation of Beltransgaz may be finished before the end of this year. "The auditors are working, they have almost entered the final stretch. They are preparing documents for creation of a joint enterprise," the minister said.

Partial control over Belarusian gas pipeline system is the main condition put forward by Gazprom in gas price talks with Belarus. Up until now Belarus has been receiving Russian gas for the same price as domestic consumers, which is already lower than the self-costs of Gazprom's gas production. This was done because Russia and Belarus were hoping to create a unified state and because, just like in Ukraine, Gazprom has been promised control over Belarusian gas pipeline network. Just like Ukraine Belarus is a transit territory for Russian gas going to Western Europe and Gazprom likes to keep pipelines under its control.

However, the promises of joint venture between Gazprom and Beltransgaz were unrealized, because the two sides could not agree on evaluation of the Belarusian gas pipeline company. Gazprom felt that Belarusian evaluation was too high, while Belarusian authorities called Gazprom's evaluation of Beltransgaz severely underestimated. Couple of months ago Gazprom has threatened to raise next year's gas price for Belarus by several times and only agreed to reconsider on condition of creating a joint venture to manage the pipeline system of Russia's Western neighbor.

Source:

http://www.mosnews.com/money/2006/12/25/gazprombelarus.shtml