Russia wins control of Belarus gas network for $2.5 bn

25th November 2011, Comments 0 comments

Russia's natural gas giant Gazprom said Friday it had signed a $2.5 billion deal to acquire the 50-percent stake it does not own already in the natural gas pipeline network of Belarus.

The Beltransgaz deal also sees Moscow win full ownership of the Yamal natural gas pipeline to Europe and allows Belarus to start paying Russian domestic prices for its energy imports as of 2014.

"This means that Gazprom will become the full owner of Beltransgaz," the Russian natural gas monopoly said in a statement.

The deal's signature was overseen by visiting Belarus President Alexander Lukashenko and the Russian ruling tandem of President Dmitry Medvedev and Prime Minister Vladimir Putin.

The Russian premier intends to return to the Kremlin next year after a 2000-2008 presidency and was the first to announce the deal's successful agreement earlier on Friday afternoon.

"This is a substantial rebate. It will help to keep at least $2 billion in Belarus," Putin in reference to the drop from the $244 per thousand cubic metres this year to $164 that Belarus will have to pay for Russian gas in 2012.

The gas agreement is vital to helping Belarus stave off its worst economic crisis since the Soviet era and should help ease pressure on Lukashenko's regime that has been mounting in Europe over his domestic rights record.

The 17-year Belarus veteran had firmly opposed ceding control of prized economic assets to Russia and only relented after the country was forced to drastically devalue its currency following a shortage of foreign exchange.

© 2011 AFP

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