A Russian pipeline in Belarus to bypass Ukraine

Moscow has announced a new large-scale initiative – the building of another gas pipeline bypassing Ukraine via Belarus, writes Roman Grom.

Russian President Vladimir Putin entrusted Gazprom with further developing of the gas pipeline “Jamal-Europe 2″ to supply gas to Poland, Slovakia, and Hungary. The new pipeline will bring anything good neither to the Ukrainian-Russian relations, nor Belarus, as all the benefits from the new project will bypass the country.

Time and again Belarus has advocated the construction of the second pipeline “Jamal-Europe”. Minsk has been lobbying for it for several years. The first vice-premier of the Belarusian government Vladimir Siamashka repeatedly spoke in favour of the pipeline. He argued that the new pipeline would be the shortest route for gas transportation and that Belarus will benefit from this project in the form of taxes from gas companies working on its territory – the more transit, the higher taxes. Yet the project has got off the ground only after Moscow had become the owner of Beltransgaz. In the present circumstances, when the Kremlin possesses 100% of the Belarusian gas transportation system, the new pipeline will not pay, apparently, any real dividends.

The new branch of the gas “Jamal – Europe” pipeline is to have been built by 2018. This time-frame was set by the head of Gazprom Alexey Miller during his meeting with the President of Russia. Initially Moscow decided to re-start the new route after a scandal with Ukraine. Miller said that Ukraine cheated by getting reverse gas supplies from Europe through a closed gas line in the border area with Hungary. And the new project would help Moscow to continue the strategy of building a gas pipeline bypassing Ukraine. “Jamal – Europe – 2″ is primarily directed against the officials in Kyiv. Obviously, after the launch of the pipeline, gas transit through Ukraine will lose its relevance. The new-old branch will run up to additional 15 billion cubic meters of gas through the territory of Belarus.

Poland does not support Putin’s ideas, as they can be in the way of the pro-European direction of Ukrainian politics. Polish politicians believe that the gas war could push Ukraine into the arms of Russia, because Kyiv will not have any economic weapons against Moscow. The Polish Minister of State Property Mikalai Budzianowski made quite a brusque statement that the implementation of the construction project is up in the air, as the country does not need a new pipeline network. Poland ia building a liquefied gas terminal right now, and in the near future it plans to implement projects related to exploitation of shale gas. In addition, the pipeline system will soon be merged with the gas transport infrastructure of Slovakia, the Czech Republic, and Germany. That’s why the Polish authorities consider the construction of a new branch of Gazprom unreasonable. Poland has six months to give an answer to the Russian proposal on the construction of the pipeline.

It is equally important that Gazprom will not pay for the transit of gas through Belarus. The gas transportation system of Belarus is in the ownership of Gazprom. Today, therefore, the transit through the territory of Belarus through the pipeline “Jamal – Europe-1″ is the most cost-saving way for Moscow.

However, experts have doubts about a real need for another gas pipeline. At present, Russia supplies about 140 billion cubic meters of gas to Europe. The capacity of new gas corridors is several times bigger than the actual demand of the European market. It is very difficult to predict whether this project will be called-for in a few years, since now we can observe the inverse trend: the demand for Russian natural gas is going down.

Alexander Lukashenko sold Beltransgaz to the Russian giant in late 2011. At that moment, the price paid – $ 2.5 billion – was considered a successful agreement, as Minsk sold just a useless rusty pipe. However, it turned out that the condition of the pipe was not so bd. In case the decision on the construction of the “Jamal – Europe – 2″ is positive, it will be a strategic defeat for the economic interests of Belarus. As for bonuses that Minsk can get from the construction, they are minimal, if any. For the state budget, it would be just small taxes from Gazprom and jobs for Belarusian builders. All the other gas opportunities have already been sold.

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