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Yamal-Europe pipeline to benefit Belarus, but not to boost Minsk’s bargaining power

Russia's Gazprom gas giant appears to be leaning toward building a second leg of the Yamal-Europe pipeline through Belarus. Russian President Vladimir Putin earlier suggested that the company explore the possibility with a view to increasing the "reliability" of gas deliveries to Poland, Slovakia and Hungary.

The construction of the second Yamal-Europe leg was planned in the 1990s, but disputes with Belarus and Ukraine over transit prompted Gazprom to build two pipelines bypassing both. In October 2012 it put into operation the Nord Stream, a Baltic Sea offshore pipeline. The first leg of South Stream, which crosses the Black Sea, is to be completed this year.

Putin’s proposal to revive the Yamal-Europe pipeline came as a surprise, because the bypass pipelines will have a sufficient capacity upon completion.

However, Belarus is the shortest route that can considerably reduce costs. Gazprom CEO Aleksei Miller said earlier this week that delivering gas through the first leg of the pipeline to customers west of Belarus was "economically efficient." He said that another leg of the Yamal-Europe pipeline could be completed in 2018 or 2019.

Now that Russia has bypass pipelines and owns the company operating Belarus’ gas pipeline system, Belarus and Ukraine have much less bargaining power as they cannot disrupt deliveries.

In addition, the project’s revival would increase pressure on Ukraine to sell its pipeline system to Russia and possibly to join the Customs Union and the Eurasian Union.

When the second leg is in operation, Gazprom will no longer need to pump gas via Ukraine. On the other hand, if Kyiv joins the Customs Union it may be offered preferential treatment like Belarus.

Gazprom and Poland’s pipeline operator EuRoPol GAZ signed a memorandum of understanding last week regarding the Russian gas giant’s plans to build a second leg of its Yamal-Europe pipeline.

The pipeline is expected to cross Belarus and allow Gazprom to supply 15 billion more cubic meters of gas to Poland, Slovakia and Hungary via the country annually, according to the company’s press office.

A feasibility study for the project is expected to be completed within the next six months.

But there are still question marks hanging over the project. It is unclear whether Russia will produce enough natural gas to ensure the operation of all of its pipelines.

Besides, European countries may not need so much gas as they seek to reduce their dependence on Russian energy supplies.

Shale and liquefied petroleum gas is seen as a viable alternative to Russian supplies.

In any event, the second leg would enhance Belarus’ transit role and increase its geopolitical weight. It would be an additional source of budget revenue and the project would create jobs.

Since the 1990s, Alyaksandr Lukashenka urged Russia to build the second leg and criticized it for wasting money on bypass pipelines. However, the project is no longer as important for Belarus as in the 1990s. //BelaPAN