Beltransgaz, now renamed Gazprom Transgaz Belarus, needs to renegotiate terms of Russian oil and gas deliveries every year on December 31 – the very date when Gazprom’s transit agreement with Ukraine also comes to an end. However, while Naftogaz Ukrainy and Gazprom are embroiled in a lengthy dispute over gas supply, pricing and payment, Russia’s energy relations with its western neighbour Belarus have been very smooth sailing given that the long-serving Belarusian President is a political allay of Russia.
The latest deal is vital for European security of supply because the Belarus-Poland pipeline link is one of Gazprom’s three main arteries of supplying Russian gas onwards to Germany and beyond. Russia currently supplies one-third of Europe's natural gas and wants to maintain its export at this level, which is why it is pressing ahead with the completion of Nord Stream 2, the second pipeline leg of a major interconnector through the Baltic Sea to Greifswald in northeast Germany.
Pipeline politics
Once Nord Stream 2 is in place and fully operational --and provided gas transits via the Belarus/Poland route resume -- Gazprom would no longer need to use the route through Ukraine which would jeopardize supply security in Ukraine itself and in several eastern European countries.
Gazprom said is striving to complete construction of the Nord Stream 2 and TurkStream pipeline projects in 2020. Over the past few months, Gazprom has already substantially reduced the volumes of gas it transits across Ukraine, and seeks reduce the level further by ramping up export volumes through Nord Stream and Turkish Stream instead. The Ukrainian state is at risk of losing roughly $3 billion gas-transit fees — about 3 percent of national GDP.
Rumours of Russia-Belarus 'merger'
The Belarusian President Alexander Lukashenko has rebuked „peculiar hints“ from the Russian President Vladimir Putin that the two countries could merge into a new „Union State“ in return for cheaper oil and gas supplies.
For Putin, the creation of a new “Union State” would allow him to remain in power even after his presidential term comes to an end. Absorbing Belarus would extend Russia’s political reach towards the west, but Lukashenko stressed he is neither the Belarusian people nor the Russians “want to go this way.”