Friday, June 21, 2013

Russia-Belarus Cold Gas War (December 2006)

Belarus is Offered to Become a Part of Russia? So Nice!



Russian President Vladimir Putin likes to play karate. Belarusian "President" Aleksandr Lukashenko likes to play hockey. So, both of them are using very different means to resolve Russia-Belarus gas conflict.

Another round of gas talks between Russia and Belarus broke up Tuesday Dec. 26, 2006 without any agreement. Belarusian "President" Alexandr Lukashenko has five days to make up his mind whether to pay market prices for Russian gas or agree that Belarus will become a part Russia.
In the former case, gas prices for Belarus will go up from $46.7 to $105 per 1,000 cu. meters. Should the latter be true, Belarus will have to enter the Russian-Belarusian United State on the Kremlin's terms, Russian newspaper Kommersant writes.

Breaking a tradition of keeping business offers in secret, Gazprom released details on the course of gas talks with the Belarusian government. Russia entered the talks, suggesting raising prices to $200/1,000 cu. meters, the official said. However, as gas exports to Belarus are not taxed, the talks opened with the price of $170. Yet, the Belarusian party dismissed the offer as the one that runs against the allied spirit. Gazprom lowered the bar to $110 and ended up with offering $105 at Tuesday's talks in Moscow.

Gazprom was expected to receive stocks of BelTransGaz in 2007-2010 as part of payments for natural gas. In addition, Gazprom would have received from Belarus $1.5 billion ($75/1,000 cu. meters) next year and $2.1 billion ($105) in 2008, sending the total of 20 billion cu. meters of gas to its Western neighbor. Gazprom Chief Executive Alexey Miller confirmed Tuesday that the Russian gas monopolist was willing to pay $2.5 billion for BelTransGaz's shares.

A well-known Russian political analyst Andrei Piontkovskiy coments to the bilateral relations:
"It is a natural end of "matrimonial" or "premarital" relations. The essence is that Russia, which is nostalgic about its imperial greatness, was waiting and believing that Aleksandr Lukashenko would "marry" it and join the Russian Federation as 8th subject. Aleksandr Lukashenko was skilfully playing on those Russia's elite complexes of of lost greatness for many years, and made them pay huge subsidies: billions dollars annually."

"By the way, the both are pursuing not only state interests, but their personal ones. Everybody in Russia knows that Putin is a shadow owner of Gazprom", - the political analyst said.

Guess who is a shadow owner of BelTransGaz?
Bingo!

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