Russia-Belarus Gas Row May Harmonize EU Energy Policy

A dispute between Belarus and OAO Gazprom that threatens to interrupt gas supplies to the European Union next week may lead to a more integrated EU energy policy and greater diversification of energy sources.

Gazprom changed a June demand that Belarus pays four times more for its gas next year into a request this week that it sell half of Beltransgaz, the country’s pipeline operator, in return for preferential pricing until 2011. Belarus broke off talks on Dec. 26 and threatened to halt or siphon off transit deliveries if Gazprom shut down supplies, before agreeing today to resume talks.

“Politically, there’s an understanding among member states that a more coordinated energy policy is vital,” European Commission spokesman Amadeu Altafaj said today by telephone. “The EU is very dependent on foreign suppliers for both gas and oil, and so it’s clear that a more integrated energy policy is needed — and not only during a crisis.”

The EU became Russia’s largest energy market in 2004, when 10 countries joined the bloc. Some commentators, particularly in the former Soviet satellite states of Eastern Europe, say Russia is using Gazprom to put political pressure on the EU.

“Gas and oil have become instruments for Russia’s imperialist policy,” Bronislaw Geremek, a European parliamentary deputy and former Polish foreign minister, said in an interview with private broadcaster TVN24.

German Concern

Russia temporarily cut off gas deliveries to Ukraine in January over a similar price spat. The clash led to gas shortages in EU countries including Germany, France and Poland and dented Gazprom’s reputation as a reliable supplier.

The German government said it is concerned, though it gave assurances there was no danger of gas shortages in Germany should Gazprom supplies be halted.

“I appeal to both parties to reach a sustainable agreement about the price as quickly as possible,” Economy Minister Michael Glos said in an e-mailed statement.

Gazprom is taking advantage of its importance as a gas exporter to raise prices and demand concessions from client countries. Last week, Georgia agreed to pay more than double this year’s prices for gas in 2007, while Moldova will pay $170 per 1,000 cubic meters next year, up from $160 at present.

EU Energy Commissioner Andris Piebalgs pressed Belarus and Russia to find a solution quickly and said the commission, the EU’s executive body, is monitoring the situation “very closely,” as it may disrupt gas supplies to EU member states.

Supplies to Poland

Yesterday, Gazprom told Poland’s gas monopoly, Polskie Gornictwo Naftowe i Gazownictwo SA or PGNiG, that supplies may be disrupted from Jan. 1 if Beltransgaz tapped transit gas for Belarusian domestic use. Belarus pays $46.68 for 1,000 cubic meters of gas, about a fifth of West European prices.

Gazprom Deputy Chief Executive Alexander Medvedev called Belarus’s threat to stop or use transit supplies an attempt to “blackmail” Europe and Russia. Located between Poland and Russia, Belarus has been ruled for 12 years by President Alexander Lukashenko, who won a disputed third term this year in elections the U.S. and the EU criticized as undemocratic.

Polish-Russian ties have been frosty since Gazprom signed a contract last year with two German companies to build a pipeline underneath the Baltic Sea, a deal compared by Polish Defense Minister Radoslaw Sikorski to the Hitler-Stalin Pact that carved up Poland before World War II. Relations cooled further in November when Poland vetoed EU trade talks with Russia until Russia lifted a year-old ban on Polish food products.

`Extremely Dependent’

“Poland is extremely dependent on the gas coming from Russia,” Altafaj said. “It hasn’t got the same stocks as other countries; Poland hasn’t developed the availability of stocks that other countries have developed.”

While Germany has the fourth-largest gas reserves in the 25- member EU, according to German Economy Ministry spokeswoman Beatrix Brodkorb, Poland has reserves of only 1.6 billion cubic meters, estimated at enough to supply the country for just two to three weeks if the winter becomes more severe.

“We’re still hoping the dispute is solved this week,” said Magdalena Kicinska, a PGNiG spokeswoman. “We do have plans to increase stocks, but that’s an investment of months and not a few weeks.”