Gazprom Finally Bags Beltransgaz
Gazprom has finally achieved it goal of outright ownership of Belarusian pipeline operator Beltransgaz.
The Russian gas export monopoly already had owned 50 percent in Beltransgaz, and had been seeking to gain full control for the past years. Beltransgaz transports about 20 percent of Russia’s Europe-bound gas exports.
Beltransgaz operates 7,500 kilometers (4,660 miles) of gas pipelines, five compressor plants, three underground gas storage facilities, 233 gas distribution plants, 26 refueling compressor stations and six gas-measuring stations. The company also operates the Belarusian section of the Yamal-Europe pipeline and the Northern Lights pipeline.
Gazprom is reportedly paying $2.5 billion for the remaining 50 percent stake.
The sale is also linked to terms of new gas supply and transit contracts. Current gas agreements were to expire at the end of this year.
Gazprom will now charge Belarus $164 per 1,000 cubic meters of gas in the first quarter of next year, a significant reduction from the $286 per 1,000 cubic meters presently charged.
The gas price charged by Gazprom to customers in Europe ranges around $400 per 1,000 cubic meters.
Belarus has been hit by its worst financial crisis since the 1991 fall of the Soviet Union, which has led to sharp devaluation of the national currency and triggered high inflation that has eroded public savings.
"We are making a significant discount for our Belarusian friends and partners," Putin said. He added that Russia also agreed to restructure Belarus' debt for previous supplies.
Gazprom said in a statement that in 2012 Belarus would purchase 22.5 billion cubic meters of gas, then in 2013 and 2014 it would take 23 billion cubic meters a year.
"Acquisition of Beltransgaz means that the transit flow of Russian gas via Belarus and Poland to Germany is likely to stay intact. The Nord Stream and South Stream pipelines will be loaded by reducing the transit via Ukraine and Slovakia," commented Mikhail Korchemkin, of East European Gas Analysis.
Relations between Russia and Belarus have been acrimonious in recent times. Belarus sought to attract foreign investors to its energy and petrochemical industries and expand economic and political ties with the European Union, a move that irks Russian leaders.
In June 2010, Russia threaten to cut off gas supplies to Belarus over its failure to pay a $200 million gas bill, an action that could have impacted natural gas deliveries to Western Europe.