OREANDA-NEWS. July 01, 2010. The government of Belarus is confident in meeting annual targets for economic growth, said at joint session of the National Assembly First Deputy Prime Minister of Belarus Vladimir Semashko.

"We have no doubt that we will perform the job of the year", – he stressed.

At the same time Vladimir Semashko has reminded, that the rate of growth of GDP in Belarus in 2010 should reach 111-113%, industrial production – 110-112% – in agriculture, 110-111. "This is an extremely intense job and very high rates", – said Vladimir Semashko.

First Deputy Prime Minister explained that "the establishment of such a strap connected with the fact that Belarus has cried out that the rate of which was raised at the beginning of five-year – every year for GDP growth to have an average 8,5-10%, and industrial production – 11-13%. Behind schedule due to all the known reasons – financial and economic crisis and recession, which engulfed the absolute majority of the world, stressed Vladimir Semashko. He recalled that in 2009 GDP grew by 100.2%. "The President set a task to compensate for the costs that we have had for the past year, and perform a five-year task," – said Vladimir Semashko. Analyzing the results of the economy over 5 months of this year, Deputy Prime Minister noted that these results suggest that the orders of the President of the Government fulfilled.

Vladimir Semashko is confident that it will be possible to perform the task and the annual growth rate of industrial production – 110-112%. "Everything indicates that we also carry out this task. Industry always have been and will be pulling horse economy," – he said.

Analyzing the contribution of various ministries and departments in the development of industrial production, the First Deputy Prime Minister pointed out that not only performs the task fuel industry – Belarusian oil refineries. "At the same time we must ensure that by the end of the year, at least, one hundred percent of their load," – he added. Speaking about the work of other companies and corporations, Vladimir Semashko informed that, for example, Ministry of Industry, despite the difficulties, should be on schedule. The same pattern and Bellesbumprom. First Deputy Prime Minister expressed confidence that with the task handle and Bellegprom. "Project for the six months 109,9% will be satisfied and even more so," – he said. MAZ is a task before the end of the year to go to 118,5%. "We believe that up to August-September will be a turn, the company will come to 100% and will move on," – he said.

Analyzing the work this year BelAZ, Vladimir Semashko noted that the company is also proceeding on schedule, operate profitably, the volume of its sales are growing.

Turning to oil and gas industry, Vladimir Semashko noted that on 1 January Russia started supplying oil to Belarus under absolutely new terms. “In 2007-2009 Belarus received Russian oil at preferential prices and paid for both oil and import customs duties at preferential rates. The Russian Federation supplies 21 million tonnes to Belarus, and only 6.3 million tonnes of this volume are duty free. This is the reason why Belarus’ refinery utilization reduced to 70%, he said.

In January-May this year Belarusian oil refineries were supplied with 7.385 million tonnes of oil, including 3.576 million tonnes of duty-free oil. Belorusneft supplied additional 838,000 tonnes of Belarusian oil to the Mozyr oil refinery. Moreover, Belarus got 240,000 tonnes of oil from Venezuela. Another 320,000 tonnes of oil from Venezuela are expected to arrive in July. “The task is to get Belarus supplied with 4 million tonnes of oil. Another goal is to get Belarus’ refinery utilization to reach 100% by the end of the year. The capacity of each of the Belarusian refineries is 10.5 million tonnes a year, and after the upgrade – 12 million tonnes,” Vladimir Semashko said.

Speaking about the economic performance of the Belarusian oil refineries, Vladimir Semashko noted that Mozyr oil refinery started reporting profits in March. In the five months from January to April the profitability made up 4.3%. Naftan was back into the black in April. The profits are big enough to enable the refineries to proceed with their investment projects, Vladimir Semashko said.

Belarus intends to diversify gas supplies and routes, Vladimir Semashko said. This problem is very important for everyone, including Europe. So, it is crucial that we implement this promising project, construct a LNG plant in Belarus. “We need to construct a LNG plant. Liquefied gas can be supplied via a gas pipe, and this will be cheaper than natural gas,” the First Vice Premier noted.

Vladimir Semashko reminded the MPs that today the price of natural gas depends on oil price. The price for liquefied gas is much lower than the prices at which Gazprom sells in Europe. Taking into account a possibility to organize spot sales, liquefied gas looks very profitable. Today in Europe we may buy liquefied gas at the price of \\$150 per 1,000 cubic meters. “Therefore we need to get into this whatever they say,” Vladimir Semashko said. The Government has charged the Energy Ministry to consider this issue with the neighboring countries which are dealing with this problem too.

Belarus for a long time will use gas as primary energy source, said Vladimir Semashko. From year to year in the republic increases gas consumption. This year will consume 21.6 billion cubic meters of gas. "These figures are confirmed balances of energy resources from Russia", – said Vladimir Semashko.

Currently, the power of underground gas storage facilities in Belarus can store 980 million cubic meters of gas. Vladimir Semashko said that the gas pumped into underground reservoirs to ensure that in adverse times could systematically pick out gas consumption. "To the consumer does not feel the possible disruption of gas," – explained Deputy Prime Minister.

However, the energy security of the country requires that the volume of gas injection into underground gas storage facilities have been increased, "that the country has been volatile, we must have at 3-4 months of gas in storage." In this regard, Belarus aims to have 4-5 billion cubic meters of gas in underground storage. By 2020, develop the necessary capacity of underground gas storage facilities to 4,5 billion cubic meters At the same time Vladimir Semashko has reminded, that in 2001 Belarus was a natural gas storage capacity of 350 million cubic meters (Osipovichi). There are also Prybuz'ke and Mozyr underground gas storage facilities. Mozyr underground gas storage capacity close to 1 billion cubic meters Perspective is also a playground Nezhinskaya to create an underground gas storage facilities. "We will now proceed to its study", – said Vladimir Semashko.

Referring to the Belarusian-Russian relations in the oil and gas industry, First Deputy Prime Minister said that Beltransgaz and Gazprom on July 1 to sign a supplementary agreement to the contract for gas transit.

“The document has already been approved by Gazprom, they admit their debt,” the First Vice-Premier said.

“The supplemental agreement to the contract is very likely to be signed tomorrow; Russia has accepted the gas transit rate of USD1.88 per 1,000 cubic meters per 100 km,” Vladimir Semashko said.

First Deputy Prime Minister also said that Belarus retains its requirements for entry into the Customs Union.

 “Our Custom Union accession terms are clear. Now routine work is underway. The discussion of our terms is in progress. I think we will get the answers to these questions on 4 or 5 July,” Vladimir Semashko said.

Belarus has entered the first phase of the Customs Union. “We are leaving the door open. We have some issues as to the further integration,” Vladimir Semashko said.

“Russia’s introducing duties on oil products is nonsense. Ok, we finally agreed to the duties on oil. But the duties on oil products are illegal from the juridical point of view and contradict all international agreements,” he said.

However, such conditions made Belarus look for other markets where it virtually had no presence. At the same time, Belarus is not going to give up on the markets where it has worked for decades including Russia and other CIS countries.

Vladimir Semashko noted that Belarus now more profitable to buy Venezuelan oil, than with the Russian duty. According to him, Belarus buys oil from Venezuela "at a good price." He added that if you buy the Russian oil with absolute duty, Belarus is a loss, but on Venezuelan oil – wins. "The oil that we brought from Venezuela, we have earned, but that's a plus, not minus," – noted Vladimir Semashko.

According to him, over the past two years on refining Venezuelan oil Belarus earned \\$104 million net profit. In general, Belarus plans to enter the annual amount of Venezuelan oil to 10 million tons.

In his view, Belarus should not rely on one route; there should be an initiative. “This initiative should be based on economic feasibility; better and cheaper routes should be found, every dollar is important,” he said. The geographic position of Belarusian refineries will also be taken into consideration. “One of them is located in the south, the other in the north, we will bear it in mind,” he added.

The results of the study of the alternative oil routes have been documented. “You will know about these documents by the end of July,” the First Vice Premier said.

Vladimir Semashko did not rule out a possibility that other countries besides Ukraine will use Odessa–Brody pipeline to pump oil in the averse mode. “It is possible that Azerbaijan will join the project. Other countries might also want to use Odessa–Brody pipeline to pump oil in the averse mode,” he said.

Also, Vladimir Semashko said that Belarus in October 2010 to begin oil production in Iran.

"There we are able to produce 1.5 million tons of oil on the Jofeir field", – said Deputy Prime Minister.

According to Vladimir Semashko, Chinese investors purchasing Belarusian potash fertilizers are the most probable buyers of the stake in Belaruskali. “In theory, the fact that China is among the biggest buyers of our potash fertilizers will guarantee the steady exports of the fertilizers if China purchases a stake in the company,” he said.

Vladimir Semashko underlined that Belaruskali’s minority stake is estimated at about USD6-7 billion. “It is a probable cost of the minority stake, not even a blocking stake. The overall cost of the company is many times higher than the declared cost,” the First Vice-Premier specified.

The manufacturing corporation Belaruskali is one of the world's biggest producers of potash mineral fertilizers and is the biggest producer in the CIS. Functioning on the basis of the Starobin deposit of potash salts, Belaruskali comprises four mining departments, auxiliary shops and servicing units. The company employs about 20,000 professionals. Belaruskali products are supplied to over 50 countries across the globe.