Bloomberg News

Belarus Demands Rent From Russia for Pipelines

January 23, 2007

Belarus is seeking rent for the pipelines Russia uses to supply Europe with oil and gas, President Alexander Lukashenko said today, two weeks after Russia forced the country to pay more for its energy.

``Russia has a unique resource, hydrocarbons,'' Lukashenko said. ``Our strategic resource is our geopolitical location.''

Belarus will lose $3.5 billion this year after Russia cut subsidies, Lukashenko said. Belarus should therefore require Russia to pay for the ground below its pipelines and for transporting oil, Lukashenko said, according to the official Belta news service.

``It's a strange announcement,'' said Viktor Grigoryev, a vice- president at Russian oil pipeline monopoly OAO Transneft. ``All the oil pipelines crossing Belarus belong to the Belarusians.''

An agreement on oil transit fees was reached with Belarus earlier this month, Grigoryev said.

Belarus averted a gas shutoff Jan. 1 by striking a last minute deal with OAO Gazprom, Russia's natural-gas monopoly. Lukashenko provoked an oil blockade a week later by taxing Russian oil shipments to Europe through the Druzhba pipeline.

The three-day standoff disrupted deliveries to refineries across central Europe and wasn't resolved until Lukashenko personally intervened with a personal phone call to Russian President Vladimir Putin.

To contact the reporter on this story: Lucian Kim in Moscow at lkim3@bloomberg.net

To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net


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