Supplies via Russia's oil pipeline to Poland cut off (Roundup)

Jan 8, 2007, 14:47 GMT

Warsaw/Minsk - Oil supplies from the Russian Druzhba (Friendship) pipeline to Western Europe were cut off by the Belarusian government because of price dispute with Moscow.

Interfax news agency reported later that Belarus said it would be resuming oil supplies from the Russian Druzhba (Friendship) pipeline to Western Europe later in the day - but there was no confirmation.

The announcement was made by the Belarusian oil transport agency Beltranskhim, the Interfax news agency reported.

Polish Ministry of the Economy earlier reported that supplies to Poland and Germany had been cut off overnight to Monday, according to the Polish news agency PAP.

German energy officials noted reductions in pipe pressure by Monday afternoon. The switch-off also affected Ukraine and down- stream Druzhba users in the Balkans.

Officials at Belneftekhim confirmed they had enacted a shipment ban over the weekend, but gave no reasons for the shut-off.

Belarusian Prime Minister Sergei Sidorskiy in a Monday press statement hinted strongly that Minsk was attempting to pressure the Kremlin on previously-enacted hikes to the price of Russian energy exported to Belarus.

'I am willing to travel to Moscow...for a constructive dialogue to settle questions on the delivery of oil to Belarus, including the possible cancellation of compensation measures,' the statement said in part, according to the Belapan news agency.

'Compensation measures' is an expression used by Belarusian officials for retaliatory steps to the Russian year-end energy price hikes. Belarus has accused the Kremlin of violating a standing free trade treaty, by tacking a 180-dollar-per-ton export tariff onto oil exported to Belarus.

The dispute and thus the oil shipment break appeared to be heading towards an extended deadlock, with Andrei Sharonov, Russian Vice Minister for Economic Development and Trade, saying in Moscow 'talks will begin only after the removal of the illegal (Belarusian) fuel charge,' according to an Interfax news agency report.

Belarus on Thursday slapped a hefty 45-dollar-per-ton surcharge on Russian oil shipments sent across the former Soviet republic to European consumers after Russian oil and price spikes were made official on December 31, 2006. The switch-off of the Druzhba pipeline marked a dramatic escalation in the dispute.

Reports were conflicting throughout the day, in both Minsk and Moscow, on whether or not supplies would be quickly resumed.

The Belarusian government would at minimum keep the oil tap turned off until talks start between Sidorskiy and the Kremlin, a Belgaztrans official told Deutsche Presse-Agentur dpa.

The French oil company Total said no shortages were expected due to cut in crude oil deliveries to its Spergau refinery near the eastern German city of Leuna.

'Customers will continue to get their deliveries,' said Delphine Saucier, a Total spokeswoman in Berlin, adding there were enough reserves both at Spergau and at a second eastern German refinery in Schwedt of which Total owns 16.3 per cent.

Saucier said if deliveries were cut off for a longer period both refineries would turn to other crude oil sources.

German Economics Minister Michael Glos expressed concern over the pipeline closure but underlined that the current situation 'was not dramatic for Germany.'

'I expect shipments via the pipeline to resume at full capacity as soon as possible,' said Glos in a statement, adding: 'I call on the authorities in Russia and Belarus to honour their delivery transit obligation commitments.'

Glos said the current cut-off of Russian oil showed once again that Germany needed a balanced mix of energy sources.

Germany imports about 100 million tons of crude oil per year of which about 20 million tons come via the closed pipeline, said the statement.