With An Eye On Ukraine, Russia Cuts Major Gas Deal With Belarus
Russia has just reached a deal that gives Belarus discounted natural gas in exchange for control of the satellite country’s Beltransgaz utility. Will the agreement encourage Ukraine to the same?
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MOSCOW – Russian authorities have just offered Belarus what only days before it denied Ukraine: a deal for discounted natural gas. The Belarus deal is the latest twist in Europe's ongoing energy security dispute.
A quarter of the European Union's gas comes from Russia, most of which moves first through Ukraine, whose last dispute in 2009 with Moscow saw gas supplies cut off, affecting tens of millions of people.
Russian Prime Minister Vladimir Putin justified the agreement on the fact that Belarus is part of a trade union with Russia and Kazakhstan - a group that Ukraine has refused to join. But the Russian premier said also that under the terms of the deal, Moscow will also gain control over Beltransgaz, a state gas company. Russian monopoly Gazprom currently only owns 50% of Beltransgaz.
Until now, negotiations had been at an impasse but Putin said: "We hope that the lowering of the cost of gas for Belarus can be synchronized with getting the second part of Beltransgaz."
The exact discount will be the subject of further talks. Regardless of the amount, Gazprom will reportedly earn less profit from Belarus than it does from its European neighbors.
The announcement, which followed a meeting in Moscow, will exert pressure on Ukraine to strike a similar deal with Russia. Gazprom has long been trying to get a stake in Ukraine's Naftogas to ensure an uninterrupted gas supply to Europe. But Ukraine has refused, saying such a deal would undermine its sovereignty.
The head of RusEnergy, Mikhail Krutikin, said the move was simply a way to pressure Ukraine and hopefully avoid yet another energy dispute this winter. Complicating matters are uncertainty over alternative gas pipelines under construction, such as the Nord Stream and the South Stream.
"If we fail to strike a deal with Ukraine before the end of the year, we may see a repetition of the gas conflict with the consequences of gas cuts," Krutikin said.
Read the full article in Russian by Dimitry Belikov
Photo - s.lavr