Until the February 2004 gas crisis when Gazprom cut off all gas flows via Belarus the issue of
Belarus as a gas transit route was not addressed seriously despite this country's transiting
around 20% of Russia's gas exports to Europe. The gas crisis threatened the reliability of gas
supplies to Europe. It demonstrated the necessity of bringing Belarus back into focus
explaining how and why the seemingly amicable Russian-Belarussian relationship had deteriorated
to such an extent and suggesting how the problem might evolve in the future. This book shows
that the reliability of the Belarussian gas transit routes is influenced by changes in the
intensity of the Russian-Belarussian integration and explores whether Belarus is in a position
to manage (or indeed survive) within the new 'commercial' framework to which the gas issues
had shifted following the failure to establish political union. The book predicts that the
mainstay of Belarussian welfare is bound to deteriorate as Russia continues to increase its
domestic gas prices at 20% annually as part of its energy strategy and in line with WTO
requirements - thus also making Belarus's independent stance vis-à-vis Gazprom unsustainable.
In order to secure gas prices at the level of at least Russian domestic prices Belarus is
likely to return to negotiating a joint venture operating the Belarussian transit network
together with Gazprom. Yet even if such a joint venture were to be formed it would not
eliminate the main reason of the unreliability of gas transit via Belarus - the weakness of the
national economy. Therefore unless Belarus embarks on reforms leading to substantial gas
conservation it will continue to be tempted to resort to unauthorised gas off-takes and
non-payments undermining the reliability of transit.
