Yamal-2 pipe project across Belarus should be revived

Business Materials 19 October 2007 23:20 (UTC +04:00)

Russia's prime minister said previously abandoned plans to build a second leg of a pipeline delivering natural gas via Belarus to Europe should be reconsidered.

"If we take into account that in the near future a 50% stake in [Belarusian pipeline operator] Beltransgaz will pass to [Russian state gas giant] Gazprom, it would be expedient to return to the issue building a second leg to the Yamal-Europe gas pipeline," Viktor Zubkov told a news conference after a session of the Russia-Belarus Union State's Council of Ministers.

Belarusian Prime Minister Sergei Sidorsky said his country would be able to provide Russia with favorable conditions for the construction, is it did when the first leg was built.

The Yamal-Europe pipeline runs from northwest Siberia to Russia's border with Belarus, and from there extends 2,000 km (1,240 miles) to Germany, via Poland. The addition of a second leg of the pipeline was proposed in 2005, to meet Europe's growing gas demand.

The Belarusian segment of the Yamal-Europe pipeline is 575 km (360 miles) long, and has capacity of around 33 billion cubic meters per year.

Gazprom's May 18 deal to buy 50% in Belarusian pipeline operator Beltransgaz for $2.5 billion in four equal installments by 2010 is expected to tighten the Russian gas monopoly's operational control over the Yamal-Europe pipeline, so far its main export route to Central Europe.

Belarusian President Alexander Lukashenko proposed on October 12 that Russia start to build a second leg of the Yamal-Europe gas pipeline, and offered free transit for five years.

Gazprom delivers over 20 billion cubic meters of natural gas to Belarus annually. This year Belarus has imported Russian gas at a cost of $100 per 1,000 cu m, but paid only 55% of the price in the first half of the year, until Gazprom's threats to cut supplies over arrears forced Belarus to agree to the full price. ( RIA )