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Belarus discussing using Baltic ports to diversify oil imports

Belarus will consider an offer by neighboring Lithuania to use ports on the Baltic Sea to import oil, as both countries try to lessen their dependence on Russia.

Lithuania has two oil terminals on the Baltic sea, and it wants to take advantage of its geographical position to become a transit country for oil. The Belarus government said in a statement on its Web site it's interested in the offer. The cooperation between Lithuania and Belarus is a sign the countries of eastern and central Europe are banding together to circumvent Russia, the region's dominant energy supplier. The world's largest natural-gas and second-largest oil exporter, Russia increasingly is using its energy resources to wield influence over its former satellites in the old Soviet bloc. „I think that energy-supply diversification is very important for any country,” Andrey Popov, a spokesman for the Belarus foreign minister, said yesterday in a statement on the Web site. „Belarus is not an exception. We will do it.” Russia controls the pipeline network of the former Soviet Union, allowing it to dominate energy supplies in the region. Its pipeline monopoly, OAO Transneft, last year exported 4.4 million barrels a day of crude, equal to about 40% of western Europe's imports. About half of Russia's oil exports are pumped through transit states like Belarus and Ukraine. The 5,500-kilometer (3,300-mile) Druzhba pipeline through Belarus, completed in 1964, has been supplying about 83 million tons of crude a year through two branches into Ukraine, Germany, Poland, Hungary, Slovakia and the Czech Republic, according to Transneft.

Last month, Russia halted deliveries of crude oil through Druzhba, the most recent incident where it's flexed its energy muscle. In July, Russia cut off crude supplies to Lithuania's AB Mazeikiu Nafta, the only refinery in the Baltic states. And early last year, it turned off Ukraine's natural-gas supplies in another price dispute, disrupting deliveries throughout Europe. Ukrainian President Viktor Yushchenko said he backed the efforts by Lithuania to coordinate energy supplies in Ukraine, Belarus and Lithuania. He's also looking for ways to get oil and gas other than through Russia. In December, Yushchenko said his country would start shipping oil from Azerbaijan and Kazakhstan to avoid the Russian network. Pipelines through Georgia would carry crude to tankers for shipping across the Black Sea.

The proposal by Lithuanian President Valdas Adamkus calls for Belarus to use the Lithuanian railways and the Klaipeda port on the Baltic Sea for oil imports. The Lithuanian president said he discussed the plan with US Vice President Dick Cheney during a visit to Washington. „Energy, unfortunately, is becoming an instrument of politics in the region,” Rita Grumadaite, the Lithuanian president's spokeswoman, said by phone. „This is still only an idea. But Lithuania will seek to use its position as a transit country.” Belarusian President Alexander Lukashenko, who until now had few allies outside Russia, was already looking for the kind of alternative Lithuania proposed. „Let's get to serious projects and solve those issues, up to the point of building new pipelines to ports, where we will be buying oil, but no one will push us down on our knees,” Lukashenko said January 23.

At the same time, Russia's neighbors don't want to cut themselves off completely from its energy resources. OAO Gazprom, Russia's natural-gas-export monopoly and the world's biggest gas producer, drew protests from Poland, Lithuania, Latvia and Estonia when it decided to build a pipeline in the Baltic Sea directly to Germany, avoiding all four countries. Belarus may face similar problems. Russia plans to build an oil-export link to one of its own Baltic ports, Primorsk, that could end Belarus's role as a transit country. It might also find importing oil through Lithuanian ports isn't cost-effective, said Valery Nesterov, an energy analyst with Troika Dialog Investment in Moscow. „The cheapest oil deliveries come through land pipelines, such as Druzhba,” Nesterov said. „On top of extra costs such as cargo and transportation, Belarus won't be able to negotiate the oil price as with Russia. On the other hand, Nesterov said, „sometimes political arguments overcome economical facts.” (Bloomberg)