Jun 20, 2010 | 17:54 GMT

5 mins read

Russia, Belarus: Pipeline Politics

Russia said it will cut off natural gas supplies to Belarus if Minsk does not pay $192 million allegedly owed to Moscow in unpaid gas debts by June 21. Past cutoffs to Belarus and Ukraine have disrupted the gas flow to European countries farther down the supply route, but political issues could keep Germany and Poland from being affected this time, in the fairly likely event that Russia follows through with its threat.
Russia reiterated its ultimatum over natural gas supplies to Belarus on June 18, with Gazprom spokesman Sergei Kupriyanov saying that Russia will cut off 85 percent of the natural gas it sends to Belarus if Minsk does not pay the $192 million it owes Russia in unpaid gas debts by June 21. Belarusian President Aleksandr Lukashenko maintains that Belarus does not owe this money and that the two countries should resolve the dispute diplomatically. Several meetings will occur in the lead-up to the payment deadline. Gazprom chief Alexei Miller traveled to Belarus on June 19 to meet with Energy Minister Alyaksandr Azyarets, but failed to resolve the dispute. A meeting between Russian Foreign Minister Sergei Lavrov and his Belarusian counterpart, Viktor Martynov, will take place in Minsk on June 21 and a Belarusian delegation of energy and economic officials has announced it will visit Moscow on June 21 as well. Despite the numerous consultations slated to take place, it appears increasingly likely that Russia will cut off supplies to Belarus. After all, Russia has cut energy flows several times in the past few years to achieve political aims, including the 2009 natural gas cutoff to Ukraine as well as refined oil supply cutoffs to Belarus early in 2010. Because Belarus and Ukraine both serve as key transit states for Russian energy supplies to the rest of Europe, such cutoffs have proven quite painful to European countries farther down the supply route. But unlike the natural gas cutoffs to Ukraine, the impending cutoff on June 21 would likely affect Belarus alone, without disrupting Germany and Poland farther down the pipeline. (click here to enlarge image) Germany and Poland will not face disruptions for several reasons. First, the pipeline that goes through Belarus to Poland and Germany only takes 20 percent of the natural gas supplies that Russia sends to Europe, with Ukraine acting as the primary transit state for the other 80 percent of supplies. While Poland gets 65 percent of its supplies from Russia through Belarus, Poland does not rely on natural gas for its energy consumption. Only 13 percent of Poland's total energy consumption comes from natural gas, while coal — which is produced domestically — makes up more than 50 percent. Germany on the other hand does depend heavily on natural gas. Thirty percent of the country's total energy consumption comes from natural gas, 40 percent of which comes from Russia. But about 70 percent of the natural gas supplies that Germany imports from Russia transits through Ukraine. In other words, natural gas that transits through Belarus is not essential to either Poland or Germany. At the moment, most natural gas pipelines are operating below capacity because warmer weather reduces the need for energy for heating purposes. This allows countries to import fewer supplies than they do in the winter (which made the January 2009 cutoff through Ukraine particularly painful to Europe). Based on historical averages, the pipeline from Russia to Ukraine is currently operating at around 20 billion cubic meters (bcm) below capacity, and Poland and Germany can both make up any losses from the Belarusian pipeline by increasing their imports from the pipelines that transit through Ukraine, rather than Belarus. However, many countries in Europe do use the months between July and September to refill their natural gas storage tanks, which adds to consumption levels. In addition to the raw numbers, there is a political aspect to a potential cutoff being confined to Belarus. Russia has previously refused to cave in to Minsk's demands to grant it economic benefits in the form of low gas prices and would have no issue with simply turning off its natural gas exports to Belarus. But at the same time, Russia has been strengthening its relationship with Germany, particularly in the economic and energy spheres and has also been pursuing a charm offensive with Poland. Russia would not want its warming relationships with Germany and Poland to be jeopardized by an abrupt cutoff, which is why Gazprom officials have been adamant about Russia continuing to export gas supplies in the same volume to European countries. Polish Deputy Prime Minister Waldemar Pawlak backed this up by saying there is "no threat of disruption of supplies" to Poland or elsewhere in Europe if supplies are cut to Belarus. If Belarus and Russia are unable to form an agreement by June 21, there is no doubt that Moscow will be willing to follow through with its threats to cut supplies. But while this will certainly be painful for Belarus, the logistics of the Russian-European pipeline network make it highly unlikely that disruptions caused by pipeline politics will be felt by Germany and Poland.

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