Gazprom to Acquire Balance of Beltransgaz

Belarus expects to sell the remaining 50% of gas pipeline operator Beltransgaz to Russia's Gazprom this year.

Beltransgaz is a natural gas infrastructure and transportation company in Belarus and its history dates back to 1960 when the Minsk administration of cross-country pipelines was set up to run the Dashava-Minsk gas pipeline.

In 2006, Russia and Belarus agreed on a deal to sell 50 percent of Beltransgaz to Gazprom for the formation of a 50-50 gas transportation joint venture which delivers Russian natural gas to Belarusian customers and transits it to Kaliningrad Oblast of Russia, to Lithuania, Ukraine, and Poland.

The gas supply contract between the two countries expires this year. "The 2012-2014 contract needs to be signed on fundamentally new terms linked with the Common Economic Space agreement," Belarusian First Deputy Prime Minister Vladimir Semashko said, singling out pricing and tariffs.

During a meeting on Friday, Semashko and Gazprom head Alexei Miller discussed the expected sale of Belarusian shares in Beltransgaz. Both agreed during the negotiations on what direction to move further.

"The deal must be concluded this year ," Semashko told reporters. He recalled that the contract on Russian gas supplies for 2012-2014 to be concluded this year should provide for the new conditions that arise from the inter-governmental agreements on the Single Economic Space signed in December last year. According to him, voluntarily or not, the sale of the Beltransgaz stake gets linked with the signing of this contract.

Presently, the gas transportation system that Beltransgaz operates includes 7,500 kilometers (4,660 miles) of gas pipelines, five compressor plants, three underground gas storage facilities, 233 gas distribution plants, 26 refueling compressor stations and six gas measuring stations. The company also operates the Gazprom-owned Belarusian section of the Yamal-Europe pipeline.