Russia Cuts Belarus Oil Supply as Urakali CEO Kept in Minsk Jail

Russia’s state pipeline company cut oil shipments to Belarus amid a dispute over the arrest of the head of potash miner OAO Uralkali. (URKA)

OAO Transneft informed suppliers that it was reducing pipeline capacity to neighboring Belarus in September to carry out essential maintenance work, oil producer OAO Lukoil said. The action came two day’s after the Russian chief executive officer of Urakali, Vladislav Baumgertner, was imprisoned in Belarus’s capital Minsk.

Russia’s Foreign Ministry said yesterday Baumgertner’s detention threatened relations between the two countries. The executive was chairman of Belarus Potash Co., a joint venture Baumgertner dissolved at the end of July because he claimed the Belarus partner broke the terms of their pact. Belarus gets about 20 percent of revenue from the potash industry.

Transneft’s decision will lower shipments by about 400,000 tons, or a quarter of planned deliveries in September, Reuters reported, citing people it didn’t identify.

Russia has cut oil shipments to Belarus before. In 2007, a dispute over duties saw flows halted through the Druzhba pipeline that carries Russian crude through Belarus to European refineries.

Belarus President Alexandr Lukashenko, who has ruled the former Soviet republic since 1994, sold the country’s gas pipelines to OAO Gazprom (OGZD) after the countries argued over energy prices.

Transneft spokesman Igor Dyomin wasn’t available to comment when Bloomberg called his mobile number.

To contact the reporter on this story: Anna Shiryaevskaya in Moscow at ashiryaevska@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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