Lukashenko says Nord Stream makes no sense

Energy Trade

Belarus told Russia on Friday that it was making a mistake to build a gas pipeline under the „minefield” of the Baltic Sea and offered tax breaks instead to increase pipeline gas flows across its own territory.

„Why have you decided to go under the Baltic? Don’t you remember I told you that nothing good will come of this?” President Alexander Lukashenko told a meeting with journalists broadcast on state radio. „Today you not only face [problems on the] seabed, but also with mines and bombs from World War II. Why are you laying a pipeline on a minefield?” he said.

Gazprom has teamed up with Germany’s E.ON and BASF to build the Nord Stream link, which will pump 27.5 billion cubic meters of gas per year under the Baltic to Germany from early next decade. Russia supplies one-tenth of Europe’s oil needs via the Druzhba pipeline, which traverses Belarus. Nord Stream decided in August to reroute the pipeline around Denmark to stay further away from known World War II munitions dumpsites, but Lukashenko said the link also made no sense from an economic point of view.

He said Russia should instead double the capacity of the Yamal-Europe gas link, which delivers around 30 billion cubic meters of gas a year to Germany and Poland via Belarus. „If you are afraid that it is going be too expensive, we will give you tax and fee breaks on gas transit for five years. Just don’t do stupid things!”

Russian oil pipeline monopoly Transneft is considering fully shutting down Druzhba, which pumps 1 million barrels per day, and expanding its Baltic Sea port of Primorsk, forcing Poland and Germany to buy crude in tankers. n Belarus and Russia have agreed to keep for 2008 a price mechanism from a current contract setting the price for imported Russian gas at 67% of European levels, Belarus’ energy ministry said Friday. Ministry officials and Gazprom met in Moscow on Thursday to discuss prices. (themoscowtimes)

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