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    Wrap: Belarus suspends Russian oil transit to Europe over duty dispute

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    Belarus has suspended Russian oil transit to Europe over Russia's failure to pay a transit duty of $45 per metric ton of oil going through Belarusian territory.

    MOSCOW, January 8 (RIA Novosti) - Belarus has suspended Russian oil transit to Europe over Russia's failure to pay a transit duty of $45 per metric ton of oil going through Belarusian territory.

    Russia doubled the gas price for Belarus to $100 per 1,000 cu m from January 1, and also imposed an oil export duty of $180.7 per metric ton for the ten-million nation. Belarus responded January 3 by introducing the transit duty.

    Poland and Germany, which receive Russian oil via Belarus, said Monday Russian oil supplies going through the Druzhba pipeline to European customers had been disrupted. Russia's pipeline monopoly Transneft [RTS: TRNF] blamed Belarus for blocking European exports.

    Transneft said Belarus is siphoning off Russian oil designated for Europe from the Druzhba pipeline.

    Russia exports oil to Poland and Germany via the northern branch of the Druzhba pipeline.

    "From January 6, Belarus began tapping oil destined only for customers in western Europe from the Druzhba pipeline unilaterally, without any warning," Semyon Vainshtok, the head of Transneft, said.

    He said Belarus siphoned off 900 metric tons of oil in the past 24 hours alone. "In all, 79,000 metric tons of oil has been tapped since January 6," he said.

    EU Energy Commissioner Andris Piebalgs is expected to soon convene an extraordinary session to discuss energy supplies from Russia.

    A European Commission representative said the EU body is following the situation closely.

    Vainshtok called on Belarus to observe international norms, which outlaw transit discrimination. "Transit is a 'sacred cow'," he said, adding that Transneft was doing its best to increase oil exports through other pipelines.

    "The pipelines in Primorsk [outside St. Petersburg] are operating at maximum capacity of 76.5 million tons a year [1.54 million bbl/d]," Vainshtok said.

    Transneft said late last year it had increased in advance the capacity of the Baltic Pipeline System, a direct pipe from Russia to Europe, from projected 72 million metric tons a year (1.44 bbl/d) to 74 million (1.5 million bbl/d).

    The system launched in 2001 supplies Siberian oil to the Primorsk terminal bordering on Finland for export to Europe and the United States.

    The situation with Belarus resembles the energy crisis early last year when Russia, which supplies more than 25% of the EU's oil and natural gas, suspended gas exports to Ukraine amid a gas price row, affecting consumers in western Europe. Ukraine later admitted tapping Russia's Europe-designated gas.

    Vainshtok accused Belarus of planning to steal Russian oil in advance.

    "Belarus canceled the signed contracts on oil supplies to its own oil refineries for January. Why? Because they assumed they will make taps, unauthorized taps [of Russian oil] - this is how diplomats call what the Belarusian side is doing," Vainshtok told Russia's NTV television.

    Poland's economics ministry said earlier Monday that oil had stopped coming through the Druzhba pipeline, and Poland's PERN company operating the Polish section of the pipeline said it had sent a letter to the Belarusian operator last night but received no answer.

    Poland's Deputy Economics Minister Piotr Naimski said his country still had enough oil reserves to last 80 days.

    A deputy Russian economic development and trade minister said Monday talks with Belarus will start only after Minsk abolishes the transit duty.

    "Belarus's oil siphoning in response to Russia's failure to pay the illegally imposed duty resembles a trade war," Andrei Sharonov told Ekho Moskvy radio.

    Sharonov also said mutual duty-free regime and low energy prices for Belarus yielded several billion dollars annually in recent years to Belarusian budget.

    Germany's economy minister, presiding over the EU council of energy ministers, warned Monday against dramatizing the disruption of Russia's European oil supplies via Belarus.

    Michael Glos said, "I am concerned about the closure of the important Druzhba pipeline. I expect supplies [via Belarus] to be resumed soon and in full."

    The German minister also welcomed the decision of EU Energy Commissioner Andris Piebalgs to convene a special group for oil to discuss the situation.

    "As a country presiding over the European Union, Germany will do its best to prevent oil supply restrictions from disrupting deliveries to European companies and consumers," Glos said.

    He called on Russia and Belarus to meet their obligations on oil supplies and transit.

    "This incident shows once again that high reliability requires a balanced and mixed energy complex, which would avoid any unilateral dependence," Glos said, adding that it was the focus of the new energy policy pursued by the EU and expected to be discussed at the EU's summit in spring.

    Glos said Germany, which imports 20 million metric tons, or about one fifth of its annual crude needs, through Druzhba, had enough crude reserves to save the country from an energy crisis.

    "At the moment, the situation for Germany is not tragic - our oil refineries have sufficient crude reserves, which will guarantee us supplies even in the event of lengthy disruptions," he said.

    Russia's Sharonov said Moscow might turn to international organizations to make Belarus compensate the damage it caused by tapping Russia's Europe-bound oil.

    "We do not rule out such a possibility," Sharonov said but did not specify which organizations he was talking about.

    Sharonov also said Russian companies notified their western partners that problems with oil transit via Belarus were force majeure, which prevented companies from fulfilling their obligations to foreign customers.

    He said officials from Russian ministries and agencies concerned and Transneft managers had gathered for an emergency session.

    Sharonov also said Transneft proposed that Belarus compensate for oil shortfalls of Western companies with the oil "arrested" by Minsk, which totals several hundreds of thousands of metric tons.

    Belarus's Foreign Ministry said a Belarusian delegation departed for Moscow to discuss the oil dispute.

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