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November 10, 2007
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Home / Issue Archive / 2007 / February #2 / Russia Considers Cutting Transit Dependence on Belarus

№ 2 (February 2007)

Russia Considers Cutting Transit Dependence on Belarus

Head of Russian state pipeline operator Transneft Semyon Vainshtok said Tuesday the construction of a direct pipeline to Europe could begin as early as April aiming to cut the transit dependence on neighboring Belarus in half. This move is expected to help Russia redeem its reputation as a reliable oil supplier tarnished by January’s events when oil supplies to Europe were cut off due to economic tensions between the two countries and resumed when new transit tariffs were introduced. Today, Belarus faces having its transit profits considerably reduced. The Druzhba pipeline transports 100 mil metric tons of oil annually and the new pipeline, which would go from the Russian town of Unecha to seaport Primorsk in Russia’s European enclave Kaliningrad as a second leg of the Baltic pipeline system, will transport 50 mil metric tons of Siberian oil directly to Germany and on to the rest of Europe and the United States, reports RIA Novosti.

By Sergei Balashov

"We’re looking to divert half of the 100 mil metric tons (733 mil bbl) exported through Belarus to Primorsk," said Vainshtok. He also explained the reasons behind this decision. "We’re not experiencing any difficulties with transits through Belarus; however we find it compelling to diversify the direction of our pipelines to secure our Western partners from any possible transit tensions."

The amount of Russian oil which goes through the Byelorussian territory makes for about a third of Russia’s total oil exports. Belarus has been taking advantage of the situation since the tensions between the two countries started mounting after Russia made clear its intentions to establish market-based economic relations with Belarus. After introducing the transit tariff for Russian oil in January, Belarus raised it from $1.3 a tonne to $1.5 a tonne per 100 kilometers in February. The uncertainty about Belarus’ future transit policy is believed to have influenced Transneft’s latest plans to build a new pipeline. However, according to Vainshtok, the new route will be primarily beneficial to the oil companies giving them more options to choose from. 

"You’ve got to look at the map and gauge the distance between Unecha and the Polish and German borders," said Transneft’s CEO in an interview for the Kommersant newspaper, - "then if you locate Primorsk on the map you’ll see it’s much closer so I’m convinced the oilmen will use this route."

"If they find it profitable to go through Primorsk, they will go for it, if they still think it’s better to transport their oil through Belarus, they’ll use the old pipeline. They still have this right," added Vainshtok.

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Copyright © 2007 Eurasia Press (www.eurasiapress.com)