Lukashenko sides with Gazprom in dispute with Ukraine

Belarus wants to increase its long-term and guaranteed proceeds from the Russian energy transit. Complicated negotiations between the Kremlin and Kiev are in Belarus’ favour, as it plays on Russia’s side.

On November 22^nd, President Lukashenko met with Chairman of the “Gazprom” Board Alexey Miller.

The most significant outcome of the talks in Minsk, according to Miller, was the intention to increase gas transit through Belarus by 30% by 2017. After Beltransgaz was sold to Gazprom in 2011, Belarus has lower, but still guaranteed income from tax revenues.

Moreover, the likely increase in transit volume means revenue growth for Belarus from Gazprom’s investment and infrastructure projects. For instance, during the meeting Miller and Lukashenko discussed the construction of additional local pipeline bridges (Mikashevichi-Luninets), an underground gas storage, and maintenance of existing transportation systems.

In particular, Belarus is interested in the modernization of the national gas distribution system with the Gazprom’s financial support. During the meeting it was noted that Gazprom and the Belarusian Government would develop three and ten-year investment programmes for the reconstruction of gas distribution stations. Mr. Miller has declared Gazprom’s readiness to reconstruct 35 stations by 2015.

Most likely, the reason for such promising plans of Mr. Miller in Belarus is the deterioration of the situation between Gazprom and Naftogaz-Ukraine regarding gas prices and other issues, or even more broadly, between the Kremlin and Kiev regarding Ukraine’s participation in the Eurasian Economic Union. In any case, today Belarus will gain more benefits if she plays on Russia’s side, particularly, bearing in mind, that when it comes to discussion of specific conditions, Minsk only “express consent” to Gazprom plans.