BELARUS NEWS AND ANALYSIS
DATE:
30/06/2008
Minsk Wants Long-Term Transit Supplement Before Paying Higher Gas Price
MINSK. June 30 (Interfax) - Belarus will purchase natural gas from Russia at the first quarter price - $119 per 1,000 cubic meters - pending conclusion of a long-term supplementary agreement on gas transit with Gazprom (RTS: GAZP), which would revise the basic agreement on gas deliveries and transit, a source in the Belarusian state apparatus told Interfax.
"We are currently paying at the first-quarter price, $119 per 1,000 cubic meters, because no long-term agreement on gas transit has been signed. We link all these issues to revisions in the pricing formula," the source said.
As for the price of $128 per 1,000 cubic meters Russia announced effective April 1, the source said: "Before posing the issue of a gas price increase, a transit agreement must be signed."
"We will pay for gas in the second quarter at the first-quarter price of $119 per 1,000 cubic meters," First Deputy Energy Minister Eduard Tovpenets told Interfax earlier, adding that the decision came at a meeting of the supervisory board at Beltransgaz.
Beltransgaz's debt to Gazprom for imported gas amounted to $211 million as of June 1, 2008, including $184 million for the gas and $27.9 million in penalties and interest. The Belarusian concern paid $184 million by June 23, in accordance with the terms of the contract.
Belarus is initiating revision of the pricing formula for 2007- 2010 that was approved in 2006, due to the steep rises in oil prices and Russia's decision to hold off switching to netback parity pricing for domestic consumers, which was to have begun from 2011.
Beltransgaz and Gazprom signed a four-year agreement on December 31, 2006 on deliveries and transit of Russian gas in 2007-2010. The price for Belarus in 2008, 2009 and 2010 is to be 67%, 80% and 90% respectively of the European price less transportation and export duties.
The agreement also covered tariffs on transit of Russian gas through Beltransgaz pipelines ($1.45 per 1,000 cubic meters per 100 kilometers in 2007) and payment for services for managing the Yamal- Europe gas pipeline (determined by a formula). The transit tariff is to rise depending on increases in the gas price.
Since January 1, 2008 the charge for Russian gas transit through Belarus has increased by an average of 10.2%, while the price of gas has increased 19%. The charge for transit on Beltransgaz's network has risen 9.7% to $1.59 per 1,000 cu m per 100 km, while transit on Yamal-Europe has rising 10.7% to $1.66 per 1,000 cu m per 100 km.
The Belarusian Energy Ministry forecasts that natural gas transit through Belarus will decline 1.2% to 48.9 billion cubic meters (bcm) in 2008. Transit on the Beltransgaz network is expected to decline 12.5% to 16.1 bcm in 2008, but will increase 5.5% to 32.8 bcm on Yamal-Europe.
Transit in 2007 increased 11.9% to 49.5 bcm compared to forecast of 45.8 bcm.
Belarus imported 21.6 bcm of gas in 2008. Gazprom's stake in Beltransgaz, currently 25%, is slated to rise to 50% in 2010.
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