Jan 31, 2021
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Lithuania has finished badly: Lukashenka ruins the port in Klaipeda

Lithuania has finished badly: Lukashenka ruins the port in Klaipeda

Photo: Yuri Smityuk / TASS

The possibility of reorienting Belarusian transit to the ports of the Leningrad Region has been actively discussed in the media since August. Until recently, any publications on this topic had to be accompanied by a reminder that Moscow and Minsk have not yet worked out any specific agreements. But now it seems like a turning point has come. An agreement on cooperation in the field of transshipment of oil products of Belarusian origin through the seaports of the Russian Federation has been prepared – it remains only to sign it.

January 26 the Prime Minister of Belarus Roman Golovchenko met with my Russian counterpart Mikhail Mishustin and announced the signing of an agreement: “We discussed the issues of transportation of Belarusian cargo, in particular oil products, through the ports of Russia. This task was set by the President in connection with the well-known approaches of the Baltic states towards Belarus and their unfriendly position. Therefore, we are implementing this task and in the near future we plan to sign an appropriate intergovernmental agreement, which will provide economic conditions for our traders and shippers at least no worse than we had in the Baltic ports. “

The next day, the order to sign this document was published by the official Internet portal of Russian legal information. Mishustin instructed the Ministry of Transport to conduct additional negotiations with the Belarusian side and, if necessary, make changes to the text of the draft that are not of a fundamental nature.

That is, the main goal will remain unchanged – by the end of 2023, approximately 9.8 million tons of Belarusian oil products should pass through the ports of the Russian Federation. We are talking about gasoline, fuel oil, oil and gas oil. Diesel fuel is not mentioned in the product range. Probably, Belarus will continue to export it through Klaipeda. While it will continue.

“Kommersant”, citing its sources, informs that the transshipment of products from the Belarusian refineries in Ust-Luga will be carried out mainly by the “Portenergo” terminal, which is operated by SIBUR. But the specific volumes have not yet been distributed among the project participants – this issue will be resolved separately. And everything else is reflected in the agreement, which in the near future is to be signed by the Ministry of Transport of Russia on behalf of the government.

The most important information is contained in Appendix 1. It lists the range of products, transportation routes, volumes, transshipment rates, railway tariffs. The total tariff through the Russian Federation ranges from $ 27.2 (for oil) to $ 35 (for gas oil) per ton. That is, Moscow and Minsk signed an agreement for hundreds of millions of dollars.

The Russian side, of course, wanted more.

Minister of Energy of the Russian Federation Alexander Novak in September last year he said that the ports of the Leningrad region expect to get 4-6 million tons of Belarusian oil products. In fact, it turns out less: about 3.3 million tons per year.

But, firstly, nothing prevents the parties from overfulfilling the three-year plan if the terms of cooperation turn out to be mutually beneficial.

Secondly, the declared volumes are still large.

According to the Lithuanian operator of oil terminals Klaipedos nafta, in recent years about 5-6 million tons of Belarusian oil products have been transported through Lithuania – 25% of the company’s total cargo handling. In 2020, these volumes dropped sharply, but Lithuania could expect that after the end of the coronavirus epidemic and the recovery of the global economy, Klaipedos nafta will return to its previous level.

In addition, Belarus linked plans to increase the export of oil products with the port of Klaipeda. This was not hidden even in the midst of the campaign against BelNPP, which was waged by Lithuania.

This is understandable: from a logistic point of view, Klaipeda offers Belarusian shippers the most favorable conditions. The Lithuanian authorities constantly focused attention on this: they say, Lukashenko from us will not go anywhere. He knows how to count money! He sits down, calculates and understands that it is not profitable for him to redirect the goods towards Ust-Luga.

Probably, in December last year Lithuania already stopped seriously considering this threat. Negotiations between Russia and Belarus have been going on since summer, but there were no results. Then the alarm bell sounded for the Baltic republic: “Belarusian Oil Company” suspended the export of oil products through the Klaipeda port without explanation. “We understand that the decisions of our clients are most likely dictated not by economic, but by political logic, which we cannot control,” said the commercial director of Klaipėdos Nafta Mindaugas Navitsas… He also suggested that the products of Belarusian refineries will not return to Lithuania at all.

Navikas’s apocalyptic predictions did not come true. Belarus will still need the Klaipeda port, but for Lithuania this is little consolation. “In 2021, we do not expect a stable flow of Belarusian oil products through the terminals of Klaipedos nafta, and this inevitably means further pressure on the company’s results,” said the CEO of Klaipedos nafta Darius Silenskis

This topic did not resonate much in the Lithuanian media. Politicians and journalists defiantly do not pay attention to the fact that millions of tons of Belarusian oil products are leaving Klaipeda. They simply have nothing to say. They were the ones who convinced ordinary Lithuanians that one should not worry about the consequences of pressure on the Lukashenka regime. But the most serious cause for concern nevertheless appeared – this time the threats to Lukashenka turned out to be not an empty phrase.

One can, of course, hope that Minsk will not fulfill its obligations. The old man “cools down”, once again will quarrel with Putin and will abruptly end his transit experiment. However, the Russian negotiators must have considered this scenario. Therefore, the terms of the agreement leave very limited room for maneuver to the Belarusian side.

First, Moscow and Minsk agree on plans for the year. Not later than 15 days before the start of the next quarter, Belarusian companies must provide their Russian colleagues with updated data on transshipment of oil products. With a breakdown by months and with a small tolerance from the originally planned volumes. The procedure is repeated 15 days before the beginning of the month.

It turns out a kind of multi-level system that should guarantee a stable flow of Belarusian oil products to Russian ports until the end of 2023. And most importantly, contracts between specific economic entities will be concluded on the basis of the “take or pay” principle. Even if the goods from Belarus for some reason do not come to Ust-Luga, they will have to pay for them in full.

The reorientation of Belarusian transit could have begun with commercial agreements between individual companies. But Putin and Lukashenko approached the matter more seriously – they worked out a document that defines the terms of cooperation for years to come.

So far, we are talking only about transshipment of oil products. If they are followed by Belarusian fertilizers, the port of Klaipeda will have a very difficult time. Although Lithuania is not afraid. Minister of Economy Ausrine Armonaite promised to consider the offer Tikhanovskaya on the imposition of sanctions against Belaruskali: “At first, when the elections in Belarus were rigged and the repressions began, I said that, regardless of their own short-term economic interests, those people should be helped. And economic sanctions can become a weapon that works. “

By the way, elections were held in Lithuania in the fall – conservatives, who dislike Belarusian investors, seized power. When in 2019 the joint venture between Belaruskali and a businessman Igor Udovitsky wanted to expand its business in Klaipeda port, deputies Gabrielius Landsbergis and Laurinas Kasiunas saw this as a “threat to national security.” Now they determine the foreign and domestic policy of Lithuania (Landsbergis took the post of foreign minister in the new government). For them, Belarusian investors are enemies. And enemies have no place in Klaipeda port.

It is not excluded that Lithuania itself will create a situation in which “Belaruskali” will be forced to redirect its cargoes towards the Leningrad region. The economy of the Baltic republic will suffer, but no big deal. Defending democracy “from Belarus to Taiwan,” as the Lithuanian conservatives themselves put it, requires sacrifice.

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