Lately, the relations between Minsk and Kiev have intensified evidently. It is considered that they are stimulated by the EU program “Eastern Partnership” launched on May 7th and in the end of the project of “Union state”, marked by a scandalous statement of Russian Vice Prime-Minister and the Minister of Finance Aleksey Kudrin about oncoming collapse of Belarusian economy made on May 28th in Minsk. The following harsh and negative reaction of Aleksander Lukashenko guided Minsk to search for new various schemes with other states. And primarily with such neighbors as Ukraine and Lithuania on bilateral and multilateral grounds.
Thus, on July 12th Kiev hold a postponed meeting of the Heads of Ukrainian and Belarusian Governments Yulia Timoshenko and Sergey Sidorsky. The Parties agreed on resumption of energy supplies from Ukraine to Belarus. For Vilnius this is an important news from Kiev as this reality is becomes significant for Lithuanian people, for all Baltic region – the energy bridge Ukraine-Belarus-Lithuania. This project greatly corresponds with the idea of “Eastern partnership” that is not welcomed in Russia. At the moment, it has managed to reform the list of participants of this energy bridge, substituting Ukraine with its corporation “Inter RAO EAC” headed by the Vice Prime Minister Igor Sechin.
“Inter RAO EAC” owns a number of big foreign energy assets, also in Moldova, Armenia and Georgia. About 57,3 % shares of “Inter RAO EAC” (including the shares of “Energoatom” trust) belong to the state corporation “Rosatom”.
Evidently, due to the enhancing aggravation of Belarusian-Russian relations, Minsk has decided to establish an energy bridge into Baltic states together with Ukraine.
In May Belenergo and Ukrinterenergo signed a contract on supplies to Belarus of not less than 100 million kWt monthly. On July 3rd First Vice Prime Minister of Belarus Vladimir Semashko stated that Belarus plans to purchase 750 million kWh of energy from Ukraine in 2009.
Prime Minister Sidorsky managed not only to agree with Kiev on resumption of Ukrainian energy supplies to Belarus, also the Parties discussed the prospects of transit through Belarus into other states. Ukraine also observes as perspective transit supplies of oil to two biggest European Belarusian oil-processing plants in Mozyr and Novopolotsk “Naftan”. And this directly concerns Belarusian-Russian relations. It’s not a secret that the plans of Moscow to construct BPS-2 are designed to reduce its dependence from transiting states – Belarus and Poland. And also to reduce investment attractiveness of these two OPPs and existing pipelines for Russian funds. Moscow threats Belarus with complete termination of transit though its territory. There is a probability, due to political motives Russia can freeze the supplies of oil through Southern lines of “Druzhba” pipeline, as it did with the Northern line, that headed to Mažeikiai OPP in Lithuania.
It’s known that Russia considers the variant to build its own OPP in the end of BPS-2 that will be able to substitute “Naftan”. And this bothers Belarusian government.
Experts think that Belarus has a possibility of alternative implication of its pipelines. Novopolotsk “Druzhba” hasn’t transited Russian oil to Lithuania for about three years, to Latvia – for six years. The program of “Eastern Partnership” discusses some new projects of Novopolotsk pipe load. Another Belarusian pipeline in Gomel can be included into the project of Euro-Asian Oil Transportation Corridor (EAOTC), incited by Ukraine.
As known, on May 14th President Yushchenko signed a Decree on conversion of “Odessa-Brody” pipeline from reverse to adverse regime of operation. It means that now oil should flow from Odessa port into Brody city in Lvov region. Reverse regime, in which the flow still operates, pumps the “black gold” from Southern line of “Druzhba”, to which this pipeline is connected, to Odessa and than by sea – to consumers. The team of Yushchenko plans not only to redirect the oil flow, but also to extend it in the near future – already in October 2007 the representatives of Poland, Ukraine, Lithuania, Georgia and Azerbaijan signed an Agreement on the pipeline prolongation: it should reach the Northern line of “Druzhba”, i.e. to go through Poland and than to Baltic. This is how the EAOTC is assured.
It’s technical and economic design (TED) was adopted on April the 24th during the general meeting of 5-Party International Oil Transportation company “Sarmatiya”, established for adverse operation and the prolongation of the pipe “Odessa-Brody”. As an international energy security advisor of the President Bogdan Sokolovsky earlier stated “the approval of TED de jure means the accomplishment of urgent condition of international negotiations on gradual fulfilment of EAOTC project, primarily with European Committee, Parties engaged and international financial institutions”.
And there are also problems. In March 2009 Polish President Lech Kaczynski suggested to postpone the prolongation of Odessa-Brody pipeline to Plotsk (Poland) due to the crisis.
As Sokolovsky noted, the prolongation of the “flow” of “Odessa-Brody” will be funded by Europeans, who should also invest into Ukrainian Gas transporting system in accordance with Brussels agreements of March 23rd, and also to support the economy of Ukraine as the EU partner in the framework of “Eastern Partnership”.
In the background of burst “milk war”, when Russia banned Belarusian milk products after Belarus refused to participate in the summit of CSTO in Moscow on June 14th, that led to a full-scale political crisis in Belarusian-Russian relations – we are interested in some other results of the recent visit of Sergey Sidorsky to Kiev. For example, Minsk expressed its interest to use Ukrainian underground gas storages (UGS) to preserve its own gas, as today the capacity of Belarusian storage facilities is less than required, and reconstruction can take several years.
It’s noteworthy, that in future Belarus can have not only Russian gas. Hardly was it a coincidence: the statement of Minsk concerning its plans for Ukrainian UGS and the following information about official visit of Belarusian President to Turkmenistan. Lately, Ashgabat has been more independent in exporting its gas and in the limitation of Russian factor within this sphere.
During the visit of Prime Minister Sidorsky, Belarusian Foreign Affairs Ministry and Ukrainian Ministry of Economy signed a memorandum of Understanding in the sphere of implication of special anti-dumping and compensatory measures within mutual trade.
As Prime Ministers of both countries admitted, economic crisis amends mutual trade. For the first quarter of this year the goods turnover between the states has reduced for 58%, and Belarusian export even more – for 64% comparing with the previous year. An economist from Minsk Leonid Zlotnikov considers Kiev agreements as revolutionary. However, the expert doubts their firmness. The case is that the process anticipates also the opening of the market for cheaper Ukrainian goods in Belarus, especially for food products. And this will incite activity of local lobbyists, who will demand to close Belarusian market. In addition, during the talks in Kiev Belarus expressed a wish to find Ukrainian buyers for its milk products. We should remind, that such talks were already in February-March, but now this subject has become urgent due to Russian-Belarusian “milk war”.
Current trade breakthrough in the relations of Belarus and Ukraine is mainly caused by worsened relations of Minsk and Kiev with Moscow. It is a kind of joint challenge to Russia, considers political analyst Aleksey Korol. The expert also notes that Belarus has another political aspect: contacting with the ruling Ukrainian elite as a sign of liberalization of Belarus. And this sign is sent from Ukraine to West.
It seems, that the next such sign will be made with Lithuania.
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It’s known, that Belarusian Prime Minister Sergey Sidorsky will meet with the Head of Lithuanian Government Andrius Kubilius soon.
Prime Minister Sidorsky intends to discuss with Lithuanian colleague the possibility to hold in Lithuania a big Baltic-Belarusian Forum. “We are planning a great economic forum , that will demonstrate the level of development and potential of Belarusian economy, and will attract new investors from the European Union and Scandinavian states to our country”, - said Sidorsky.
And right before the voyage of Belarusian Prime Minister to Kiev, on June 11th 2009 Vilnius held the 14th session of bilateral Belarusian-Lithuanian Committee on Trade and Economic Cooperation. Belarusian delegation was headed by the Minister of Economy Nikolay Zajchenko, Lithuanian – Minister of Economy Dainius Kreivys.
The Parties discussed the issues of bilateral cooperation in the sphere of energy and transport, including attracting extra cargos to transport with container train “Viking”, the projects in the framework of transportation corridor with the EU investments. Also the subjects included: the intensification of Belarusian export-import affairs within Klaipeda port, the state of regional cooperation.
The Parties should have also discussed the issue of Belarus joining World Trade Organization (WTO). However, this is not mentioned in the official message. Probably Russia questioned this issue with its recent initiatives to start new talks on WTO joining together with Belarus and Kazakhstan within Customs Union. As the reaction shows, Brussels doesn’t yet understand such an initiative.
We should remember that from six member-states of the EU program “Eastern Partnership”, only Belarus and Armenia are not WTO members. And this prevents to establish such a beneficial free trade area of the European Union. Belarus remains as an “eastern partner” which still lacks ratified bilateral agreement with the European Union on cooperation and good neighborhood policy. Thus only multilateral cooperation is only possible.
While Brussels considers which projects with Belarus should be funded, the information that International Monetary Fund (IMF) is ready to credit Minsk 1 billion dollars has occurred pretty unexpected. It’s noteworthy that the information appeared in the heat of Belarusian-Russian crisis and the statement that the problems of collective security were discussed during the last summit of CSTO in Moscow without Belarus.
As observers notice, previous gas conflict and current milk war differ with the fact that Minsk almost has no bargaining spheres left. Everything in game at the moment is too vitally important for Belarusian Government.