Kommersant: Talks on gas price for Belarus have not even started

The decision on the cost of the Russian gas for Belarus “is bad news.”

Russia has officially promised discount for gas sold to Belarus in response to its joining the Single Economic Space and in exchange to obligation to give Gazprom control over Beltransgaz. However, generally speaking, concrete talks with the country over the gas price and the size of discount have not started. Yesterday statement of Russian authorities could be just an element of pressure on Ukraine, which unlike Belarus is not ready to give control over its gas transportation system to Russia in principle, “Kommersant” writes.

Yesterday following the results of the meeting of the union state council of ministers, Prime Minister Vladimir Putin stated that “the Russian leadership” has basically agreed upon the decision to introduce descending rate for gas price for Belarus since 2012. The Premiere has noted that “it is a position both of the government, and the Russian President.” Putin has not said what the descending rate would be, and what would be the price from which calculations would start – the current price of gas in Smolensk region, as the Belarusian side had been insisting on (2,800 – 3,000 rubles per 1 thousand cubic metres for industry), or the world gas price (minus export duty of 30% and transit expenses). These are points for further negotiations of Gazprom and Beltransgaz this autumn. Putin made it clear however that the descending rate appeared directly as a result of Belarus’ agreement to join the single economic space with Russia and Kazakhstan.

Though final gas prices for Belarus have not been approved, Belarusian Premier Mikhail Myasnikovich hurried to express gratitude to his Russian colleague “for such a present.” However Putin answered back that the decision on gas price is “nothing but a present”, reminding that it is connected to the single economic space, and also to the desire of the Russian side to get controlling stake of Beltransgaz, which had not been fulfilled yet (Gazprom owns only 50% of shares without an operational management right).

Russia has promised Belarus a discount for gas since 2012 for the first time officially. Previously no promises were given, moreover, the talks were in fact in a dean end till middle of summer. Russia insisted on separate talks on gas price for Belarus, which would not depend on the cost of Russian gas transit though the country and Gazprom’s acquiring controlling stake in Beltransgaz. In July, before taking his holiday, Alexei Miller, Gazprom chief, admitted that the monopoly had to concede, and the Belarusian variant of talks would be the main one.

However, sources close to Gazprom told Kommersant that as long as the initial price from which the descending rate would be calculated for Belarus had not been chosen, it could be considered that concrete talks on gas price with Belarus have not started. They are to start in autumn.

Mikhail Korchemkin, head of East European Gas points pointed out that Belarus isn’t set to enjoy Russian prices for gas until 2015 and this hovering question mark could mean that the Moscow and Minsk’s gas negotiations are far from over and that what is happening now is an attempt to put pressure on Ukraine, he told Kommersant.

Is means that the yesterday’s statements of the prime ministers could be nothing but an attempt of pressure on Ukraine, which is not ready to give Russia control over its gas-trasporting system, as Rusenergy chief Mikhail Krutikhin said.

At a meeting of Dmitry Medvedev with Alexei Miller, Medvedev ordered — and Miller promised — that the gas trade contract should be signed by year-end, and not at the eleventh hour. The current contract was approved five years ago at 11:58 p.m. on New Year’s Eve. Ukraine’s Energy and Coal-Mining Industry Minister Yuri Boiko attended the meeting with Medvedev.

Miller made sure to stress that Ukraine could enjoy price benefits were it to follow in Belarus’ footsteps. “Our cooperation could be built around the same model that we use to work with our Belarusian friends,” Miller said after the meeting.

Ukraine’s prime minister said on Tuesday that a deal like the one Belarus has struck with the Russian state-run gas giant Gazprom would be unacceptable for Kyiv. “Belarus is following its own path, and Ukraine has its own,” Mykola Azarov, the Ukrainian prime minister, said. Gazprom is interested in gaining control over Naftogaz gas transportating system, but Ukraine is not willing to surrender.

Mikhail Krutikhin said Miller’s arguments look like a desperation gesture. Europe is not really interested in constructing new pipelines in shelf areas he said: loading level of the second branch of Nord Stream is open to question, the necessity of the third one was challenged by Angela Merkel. Thus, Russia is trying to come to an agreement on the control over the Ukrainian gas transportation system, through which Russian gas to Europe is transited steadily. “If that is not done by the end of the year, we will see a repetition of the gas conflict with shut down and all the consequences,” Mikhail Krutikhin believes. Such developments are considered possible by Korchemkin as well. Gazprom denied comments yesterday.