BELARUS NEWS AND ANALYSIS

DATE:

23/04/2007

Belarus to Lose Most Precious

Russia is ready to lend up to $1.5 billion to Belarus but claims as security the stocks of its state-run gas transport enterprise, Beltransgaz, in an attempt to speed up creation of Gazprom-Beltransgaz venture. But Belarus' President Alexander Lukashenko will hardly yield to this requirement - the emergence of such venture will bring the country's main gas pipelines under control of Russia's gas monopoly.

Gazprom BOD will deliberate on "having an interest in Beltransgaz" at April 25 meeting, the news service of Russia's gas monopoly announced past Friday. The decision to set up a venture based on Beltransgaz, where Gazprom will buy out 50 percent plus a stock, was one of the core provisions of agreement on gas sales to Belarus in 2007

Gazprom agreed to the price of $100 per a thousand cu meters instead of the initially requested $200 per a thousand cu meters once Belarus undertook to set up a venture based on Beltransgaz assets prior to June 1, 2007.

But the parties have failed so far to come to terms about the deal provisions. Gazprom yielded to the H1 price for Belarus in amount of $55 per a thousand cu meters instead of $100 per a thousand cu meters, i.e. it will derive just $1.155 billion from delivering 21 billion cu meters to the neighbor in 2007. The remainder of $0.945 billion will be settled via the loan granted by Russia's Finance Ministry to Belarus.

Belarus, however, is dragging out the venture's creation, blaming the delay on official circumlocution and the lack of time to agree on the deal by Alexander Lukashenko.

Source:

http://www.kommersant.com/p761131/gas_venture/