BELARUS NEWS AND ANALYSIS

DATE:

06/06/2007

Belarus transfers over 12 prc of Beltransgaz shares to Gazprom

MINSK, June 6 (Itar-Tass) -- Russia's Gazprom on Wednesday became the owner of 12.5 percent of Belgtransgaz shares.

Gazprom opened a special account at Belgazprombank's depositary. Beltransgaz shares are deposited in the Belarusian State Property Committee's account at the Republican Central Securities Depositary.

"Today 12.5 percent of Beltransgaz shares were transferred from the State Property Committee to Gazprom's account," a committee official said.

A contract for the sale of Beltransgaz shares to Gazprom was signed and registered in Minsk on May 18. Gazprom was due to transfer the payment within 20 working days, with June 15 as rhe deadline. Once the transfer is completed, Belarus is to hand over the shares within ten working days. A general meeting of Beltransgaz shareholders will take place within a 50-day period to elect a new supervisory council. Gazprom will have one out of eight seats on the council.

First Deputy Prime Minister Vladimir Semashko said the general meeting is scheduled for July 20.

Semashko welcomed the purchase by Russia's Gazprom of 50 percent of the Belarusian gas company Betransgaz.

"This is an important event. But this is only one of the stages in creating a joint Belarusian-Russian gas transportation company on the basis of Beltransgaz," Semashko said earlier.

He said the first stage had been completed on December 15, 2006, when the presidents of the two countries determined the main principles for creating the joint venture, the value of the company and the timeline.

Then a protocol was signed on December 31, which set the exact date for the creation of the joint venture - before June 1, 2007.

According to Semashko, the sides have also agreed upon the wholesale mark-up to the price of gas. It will be about 11 U.S. dollars per 1,000 cubic metres from January 1, 2011.

Semashko said earning from the sale of state-owned shares in Beltransgaz will not be used to pay the debt for Russian natural gas supplies to Belarus.

"The money will go to a special development fund, to the Finance Ministry's account. This money should work for the development of the economy: we have many investment projects," Semashko said.

Under the December 31, 2006 contract between Russia's Gazprom and Belarus' Beltransgaz, Belarus may pay 55 percent of the actual gas price of 100 U.S. dollars per 1,000 cubic metres in the first half of the year.

With time Belarus will pay the full price and pay off the debt. "It was correct decision at that time because the Belarusian economy was under tremendous pressure - the gas price more than doubled from 2006," Semashko said.

"But we proved our survivability," he added.

"Now a new stage is beginning, and the situation is not easy: we have to pay for current supplies and return the debt. It will not be easy but we will work hard," Semashko said.

He did not rule out that money for debt payments to Russia might be taken from a Russian stabilisation loan requested by Belarus.

Source:

http://www.itar-tass.com/eng/level2.html?NewsID=11604001&PageNum=0