The world’s biggest natural gas producer, hemmed in by the standoff over Ukraine, is adding to its properties in Russia’s other western neighbor.
Gazprom PJSC on Friday marked the start of construction of the Russian company’s Belarusian headquarters in the capital Minsk, a 36-story high-rise that’s set to become the nation’s tallest building. Speaking before the ceremony, Belarusian President Aleksandr Lukashenko told Gazprom’s chief, Alexey Miller, that his country is ready to assist the Russian exporter in boosting gas transit to Europe over its territory “if needed.”
Russia’s biggest company by market value, which fought for years to build a skyscraper in St. Petersburg, is forging ahead in Minsk even as oil’s slump weighs on export prices for its gas. Gazprom, which has also been buffeted by a pricing dispute with Ukraine, may cut its production to a record this year as demand slows, the government said in July. Ukraine halted purchases of Russian natural gas last month.
“We will always do what’s good for Russian companies and for Russia in general,” Lukashenko told Miller.
The state-run company will invest about $250 million in the new office complex, which will include five buildings, a hotel, restaurants and a skating rink, according to Lukashenko. At the president’s request, all facilities will be made available to every Belarusian, Miller said.
Lukashenko, the longest serving leader in Europe, hosted talks in Minsk in February that clinched a cease-fire in the conflict in neighboring Ukraine. Speaking in an April interview, Lukashenko said the pro-Russian insurgency there shook him and warned that Belarus wouldn’t become Russia’s “northwestern province.”
Gazprom gained full control over Belarus’s state-run gas network in 2011 after paying $5 billion in two installments, cutting prices it charges for the fuel to the former Soviet republic and promising billions of dollars of investment. That also put an end to tensions between the nations over gas supplies and ensured uninterrupted transit to the European Union, which depends on Russia for about 30 percent of its gas needs.
Payment disputes between Russia and Ukraine disrupted transit shipments to Europe in 2006 and 2009 during freezing weather. While the countries have been facing similar tensions since last year, the fuel flow to the EU hasn’t been cut off so far. The EU gets about 10 percent of its gas through pipes crossing Ukraine from Russia.
To build the high-rise, Gazprom chose the site occupied by Moscow Bus Station, a major transportation hub in the northeast of Minsk. Unveiled in 1999, the bus terminal was torn down last year in order to give way to the Gazprom project. That’s disrupted local traffic, forcing passenger streams to be redirected to smaller stations elsewhere.