“Russia has
firmly decided to dispense with transit countries while exporting its
hydrocarbons to Europe”,
said President of Russia Vladimir Putin in spring of 2008. The prospect of
losing control over the import of hydrocarbons from Russia
and Central Asia
is forcing the transit states of Eastern
Europe to act together despite their political
differences to impede the construction of alternative pipelines.
Today, the share of the Russian
Federation in the
world's gas imports accounted for 21% and 36.6% in the European. 71% of Russian
gas exports to the EU transit through Ukraine,
the so-called “South corridor”, about 20% - through the territory of Belarus,
the “Northern Corridor”, namely using networks of Yamal-Europe gas pipeline,
fully owned by Gazprom and Beltransgaz, the share of the Russian company of the
latter by 2010 should reach 50%. According to Russian experts, “maintaining or
establishing control over the entire supply chain of hydrocarbons should be
considered a basic condition for maintaining the national security of Russia”.
A dam on the way of “flows”
The desire to build a bypass of the Russian pipelines
has coincided with the worldwide rise in energy prices and the notorious “gas
war” against its Western neighbors. The first experience in the implementation
of this project was the construction of the underwater gas pipeline “Blue
Stream” in 2002. It linked Russia directly
with Turkey,
bypassing the transit through Ukraine,
Moldova,
Romania
and Bulgaria.
In 2005, a year after “gassy” clarifications of the relations between Belarus
and the Russian authorities, President Putin signed an agreement in Germany to
build a North-European gas pipeline (now the “Northern stream”, Nord Stream) going
through the bottom of the Baltic Sea. The successful finalization of the
project with the capacity of 55 billion cubic meters (the first pipeline with
27.5 billion) would substantially reduce the significance of the transit of the
Russian “blue fuel” through Ukraine,
Poland
and Belarus.
Confrontation on the oil and gas issue with Moscow
brought together the positions of the transit countries of the Baltic and Black
Sea region. The Belarusian government two years ago
called the construction of the “Northern stream” “the most stupid project of Russia”.
Alexander Lukashenko has traditionally spared no epithets: “I do not know what
can happen with this gas pipeline, which lies on a heap of ammunition”, by
saying so he then repeated the reasoning of the Lithuanian Prime Minister A.
Brazauskas. He also added that the Nord Stream “can enter in the Guinness Book
of Records” and offered instead to build a second line of the gas pipeline “Yamal-Europe”,
through the territory of Belarus
and Poland.
In February of 2009 the Belarusian leader commented on
the situation to the TV Channel “Euronews”, “Neither the" Northern
"or the" South Stream" today can replace a stream of energy
which goes to Europe through Belarus, i.e. 30% of natural gas and about 75-80
percent of the hydrocarbon raw oil. Also, the "Nord Stream" would
bring 30 billion extra to Europe in that case, however the consumption of
natural gas in Europe is growing”, said Lukashenko. Gazprom responded to this
statement with the increase in its share in Beltransgaz upto 37.5%.
The President of Ukraine Viktor Yushchenko agreed with
him and called the plans to build the “North” and the “South” flows purely “political”.
"We guarantee that the Ukrainian way to deliver Russian oil the best, the most
reliable and economic," he said.
The reaction of the Polish side was even tougher.
Aleksander Kwasniewski, then president of Poland,
described the Russian-German agreement on the construction of the “Northern
stream” as “Putin-Schröder Pact”, which is a direct allusion of the pre-WWII Molotov-Ribbentrop
Pact. He also believed that the signed agreement “is bad in terms of ecology
and weak from the economic and political points of view”. The statement of the Polish
politician is all the more surprising bearing in mind that Alexander
Kwasniewski has always belonged to the supporters of the moderate foreign
policy in relations with Moscow.
A similar attitude was supported by the leadership in Estonia,
Latvia
and Sweden.
While doing so, the Estonian side has not had a direct interest in this as the
territorial waters of the Baltic States
were not to be used for the construction of the infrastructure of the “Northern
stream”.
The joint response of the leaders of the Baltic-BlackSea region
demonstrated the new geopolitical reality. It means that despite the differences
in the foreign policy orientation and economic models these countries were
aware of their common interest in defending the region. Even in the case of
alleged threats to affect them indirectly.
Kremlin is not serious about Yamal
“The construction of the second branch of the pipeline
through the territory of Belarus to
the European Union countries can be considered after the construction of the Northern
pipeline Nordström. We shall see later if we still want to build this branch”, said
at a recent press conference, Ambassador of Russia to Belarus Alexander
Surikov.
In fact, such a statement implies a principal refusal of
the Russian side to develop the pipeline Yamal-Europe. Meanwhile, the
Belarusian leader and Lukashenko stressed that with the existing infrastructure
for the construction of the second string of the Yamal-Europe pipeline it would
have been much cheaper project than the “Nord Stream”. Nevertheless, A. Surikov
did not fail to clarify the situation: “Any state supplier while constructing its
logistic scheme aims to get away from transit states, even if the latter are
best friends”. The Russian diplomat reiterated thus the “Putin doctrine”,
outlined two years earlier.
The carrying capacity of the gas pipeline Yamal-Europe
currently stands at 29.5 billion cubic meters of natural gas. The Belarusian
side at the Moscow Energy Summit in January 2009 proposed to build a second
branch of the throughput capacity of about 27.5 billion cubic meters. It
follows that the combined capacity of the pipeline would be 57 billion cubic
meters, which is significantly higher than the design capacity of the “Northern
stream”, and the project cost would be 2.6 billion while an estimated cost of the
Nord Stream is 10,36 billion US Dollars. Proposals of the Minsk authorities
attracted the attention of some EU states who are interested in increasing the
transit of Russian gas through their territory.
For instance, during his February visit to Minsk,
the Vice-Premier of Poland Waldemar Pawlak said that “the current draft of the
second string of the Yamal gas pipeline has great chances to be put into
practice”. It is unknown what was the basis of optimism of a Polish official, however
it probably can be regarded as another gesture of solidarity in the
multi-Belarusian-Russian energy dispute.
In his turn, the Ukrainian President has no enthusiasm
for the Belarusian initiative concerning expanding pipeline “Yamal-Europe”, not
passing through the territory of Ukraine.
According to some reports, it was the subject of talks between Mr Yushchenko
and Mr Lukashenko during the January meeting of two presidents in Chernigov.
According to some Russian experts, Belarus
alone could invest into the construction of the second branch of “Yamal” and
then to offer to lease the pipeline to Gazprom. The argument, in their opinion,
may be that the cost of this project is 2-2,5 times lower than building its own
nuclear power plant. However, it is apparent that the Russian side attitude is
very painful with regard to any investment in the fuel and energy complex of
the former Soviet Union,
if there is no majority share of the Russian capital. As an example, the recent
agreement the EU - Ukraine
to modernize the Ukrainian gas transport system could be recalled, which caused
sharp reaction of a Kremlin official. As well as an attempt of Polish Orlen in
early 2000 to acquire an oil refinery in Lithuania:
Russia
just left the latter without resources.
In the embrace of PetroleumState
During a meeting with the Ukrainian President in
Chernigiv Alexander Lukashenko actually supported two energy projects relating
to the EU. The concerned transit of electricity and the completion of the construction
of the Odessa-Brody-Plock-Gdansk pipeline, which meant to transport Caspian oil
bypassing Russian territory. The territory of Belarus
could be used for a branch of the pipeline going to the Baltic ports, and could
built bridge with the Belarusian section of the pipeline “Druzhba”.
It is worth mentioning that Belarus
has changed its position on the disputed issue of the project “Odessa-Brody”.
Previously, knowing the negative reaction of their Russian colleagues, the
official Minsk was
rejecting proposals from Ukraine
to participate in its implementation. However, loyalty to the Russian
authorities in relation to the regime of Lukashenko has since also been
reduced.
In May of 2007 the Government of Russia has approved a
project to start construction of the second stage of the Baltic pipeline system
bypassing Belarus.
Alternative pipeline must pass entirely through the territory of Russia.
"We need to adequately respond to unauthorized screening of energy that is
pumped through the territory of the neighboring states, bearing in mind the
increased demands, especially in the pumping rate,” said the Russian Prime
Minister.
The idea to build a new pipeline came out immediately
after the conflict between Moscow
and Minsk
in 2007. Russia
then declared its intention to charge a fee for oil exports to Belarus
at $ 180 US Dollars per tonne, while the Belarusian leadership threatened to
impose a fee for transit of oil amounting to $ 45 per ton. “Oil War” led to a
shutdown of the pipeline “Druzhba”, which was supplying «black gold» to Europe.
The initiation of the project BPS-2 would seriously
hit the Belarusian budget revenues from oil transit through the territory of
the country. Moreover, it would reduce the investment attractiveness of “Gomeltransneft-Druzhba”
and of Novopolotsk enterprise for oil transport which were supposed to be
privatized. Russia's
Ambassador to the Republic of Belarus Surikov
previously did not exclude the interest of the Russian side in the
privatization of these facilities.
Russian diplomatic representative stressed that the
extent to which the construction of a new pipe would touch the interests of Belarus
as a transit state would depend on the creation of the Belarusian-Russian oil
company. As a contribution of the Belarusian side Alexander Surikov considers
the most profitable enterprises of petrochemical complex.
Meanwhile, according to Alfa Bank analyst N. Fedorov
neither “Druzhba”, nor BTS-2 will operate at full capacity. Consumption of oil
in Europe falls due
to the world economic crisis and the increasing oil production in Russia
itself is unlikely due to the depletion of existing fields and strong
deterioration of the infrastructure sector. Moreover, the flow of oil to the
BTS-2 will lead to higher prices of raw materials, up to 2 US Dollars a barrel.
The political nature of the second branch of BTS is
confirmed by the interested party itself. In February 2008 an Ex-Head of “Transneft”
Semen Vainshtok said in an interview with the newspaper «Kommersant»: "If Belarus
is not to politicize the issues of transit, changes in the system will not
happen. Because the construction of BPS-2 is an absolute loss and the project
aims to address only the political component, which our neighbor addresses."
Delayed transit default
The implementation of ambitious projects relating to
the transit of hydrocarbons to the EU, has been threatened in connection with
the global economic crisis. However, the Russian Vice-Premier Igor Sechin
optimistically stated last March that economic difficulties will not hinder the
implementation of projects “North” and “Southern” streams. He echoed the German
Chancellor, who believes that it is the “Nord Stream”, not “Nabucco”, that should
be a priority for the EU. In fact, Angela Merkel continues energy policy of her
predecessor Schröder, the most influential lobbyist of the interests of German
companies, shareholders of the “Nord Stream”.
However, the head of the German energy giant E. On
A.G. (20% share in the “Northern stream”) Wulf Bernotat gave an evasive answer to
the question about the creditworthiness of Gazprom, which owns the majority of
shares in the project. In recent years the Russian enterprise has been suffering
from severe losses, which calls into question the possibility of repayment. However
at the same time the plan was that loans were to finance up to 70% of the
project related to laying pipes. The seriousness of the situation confirms the
intention of the Russian side to invite the participation in the construction
and operation of a pipeline of another shareholder - GdF Suez. The construction
of “Nord Stream” is scheduled to start in the middle of 2010 and its Launch in
2011.
The delayed start of the construction of the Baltic
Pipeline System 2: it was planned that the investment decision on this project would
have been made before the end of 2007. However in December 2008 the Prime
Minister of Russia signed an order regarding the construction of the pipeline.
Transportation of oil to Europe
via the BTS-2 is tentatively to begin in the third quarter of 2012.
Thus, the Belarusian transit card in the oil and gas
bargaining with Moscow
will be effective at least until the end of 2011-2012. This will allow the current
President Alexander Lukashenko to lay on the cushion of the impact of the
global crisis in Belarus
maintaining the price attractiveness of the products of the Belarusian energy
exports. Accordingly, it is difficult to predict the dramatic worsening of the
economic situation before the next presidential election in 2011 (and other
analysts have called a possible date - 2010.). In its turn, the implementation of
the common energy projects with the EU (and possibly even adoption of a
"third energy package of the EU") and investment of Western companies
into the Belarusian ECPs can help the recognition by the international
community of another «elegant» victory of the Belarusian ruler in the
elections.
