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Russia: New Gas Discovery Puts More Pressure On Ukraine

Russia's announcement this week of a massive gas discovery in the arctic north coincides with its campaign for a pipeline to Western Europe through Poland that would bypass Ukraine. Despite Kyiv's plans to share control of its transit lines with Russia's Gazprom, Moscow now seems intent on pursuing an alternate route. RFE/RL correspondent Michael Lelyveld looks at the issues in this report.

Boston, 11 September 2000 (RFE/RL) -- A huge discovery of gas in Russia's arctic region seems to suggest that pressure will continue for new export routes that bypass Ukraine.

On Wednesday, an official of Russia's Gazprom told reporters in Moscow that the company had found a large gas field in the arctic waters east of the Yamal Peninsula.

Boris Nikitin, a member of Gazprom's executive board, said it was too soon to estimate the size of two new deposits in the Ob Gulf from results of a test well at the North-Kamennomysskoye field. But the Reuters news agency said the deposits could contain up to one trillion cubic meters of gas. Gazprom could produce 30 billion to 40 billion cubic meters annually from the field in five or six years if it invests $500 million, the agency said.

Resources of that size are likely to attract development interest from Gazprom's major European partners in countries including Germany, France, and Italy. Gazprom expects to export 130 billion cubic meters of gas to Europe this year, giving it the potential to boost exports by 30 percent as a result of the new find.

The incentive may also spur Russia's effort to complete its Yamal Peninsula pipeline project with a second line through Poland and a link to Western Europe through Slovakia. Gazprom has already been pushing the plan to reduce its reliance on transit through Ukraine, which owes at least $1.4 billion for past gas supplies. Russian transit gas has frequently been diverted from Ukrainian pipelines.

The Ukrainian government has tried to block a detour around the country by pursuing two strategies at the same time. First, it has reportedly drawn up plans to share its pipelines with Gazprom through a joint venture that would pay off its debt. It has also won pledges from Poland that it will not cooperate with a bypass plan.

But the new discovery of Yamal gas may help to support the argument that a second pipeline through Poland is needed for Western Europe, whether Ukraine settles its transit dispute or not.

On Thursday, Slovak Economy Minister Lubomir Harach appeared to put the burden of preventing the project on Poland. After meeting with Russian Prime Minister Mikhail Kasyanov in Moscow, Harach said, "If Poland says no, then we will not have (the pipeline)." The minister also said the project would depend on the privatization of Slovakia's gas monopoly and the wishes of its new owners.

One interpretation is that the Slovak government does not object to a new pipeline and does not share Poland's commitment to protecting Ukraine's interests. When Ukrainian diversions of Russian gas were first reported nearly seven years ago, countries served by the transit pipeline, including Slovakia, were among those that suffered disruptions of supplies. The involvement of the Russian prime minister is also a sign that the pipeline remains a high-level mission for Moscow.

The announcement of preliminary findings from the new gas fields may also be seen as an effort to isolate Poland and Ukraine on a matter of vital concern to Russia and the European importing countries on either side.

Although Polish Prime Minister Jerzy Buzek was reported to have confirmed his opposition to a Ukraine bypass as recently as last week, the Russian newspaper Vedomosti has cited several factors that could change Poland's course. Alternate gas supplies from Norway are said to cost 20 percent more than Russian fuel, making denial of the Russian project costly for Warsaw. Poland must decide by December on whether a pipeline to Norway should be built.

Vedomosti also argued that presidential elections in Poland next month could affect the decision. In any case, the issue may have to be resolved before Poland joins the European Union, because of an EU directive on liberalizing the gas market. Resentment against Ukraine may also rise if Poland sacrifices too much on its behalf.

All the factors point toward eventual construction of a new pipeline, even if Moscow gains a measure of control of Ukraine's transit corridor. Russia has the weight of new supplies, European markets and continuing pressure, balanced against Polish political support for Ukraine that may soon erode.

Perhaps greatest of all is the determination of Russian President Vladimir Putin to secure his country's access to export routes and hard currency earnings, which have been overshadowed by uncertainty ever since the Soviet collapse.