Gazprom Gives Belarus Three Days to Pay Bill or Face Gas Cut

By Lyubov Pronina

June 18 (Bloomberg) -- OAO Gazprom Chief Executive Officer Alexei Miller said Belarus has until June 21 to pay its $192 million gas bill to the Russian gas-export monopoly or lose as much as 85 percent of its Russian supply of the fuel.

His comments at a forum in St. Petersburg today ratchet up an increasingly acrimonious dispute between Belarus and its bigger neighbor. Gazprom spokesman Sergei Kupriyanov said on May 28 the company won't cooperate with Belarus until it pays its debt, which may swell to $600 million by the end of this year.

Relations are souring as a customs union yoking the two countries and Kazakhstan falters. Belarusian Premier Sergei Sidorsky boycotted a meeting with his Russian and Kazakh counterparts, Vladimir Putin and Karim Masimov, last month. Putin, who announced the union last June, has said the troika will miss the July 1 deadline and cited Belarus's push for continued subsidized energy as a stumbling block in talks.

Putin said in March that Belarus will receive $4.2 billion in Russian subsidies this year through lower-than-market gas prices and tax-free oil deliveries. Gazprom also paid $625 million this year for 12.5 percent of Beltransgaz, the Belarusian gas pipeline company that transports about 20 percent of Russia's Europe-bound gas exports.

Belarusian President Alexander Lukashenko has said Belarus is prepared to cede control of pipeline operator Beltransgaz and an oil refinery in exchange for the right to pay domestic Russian prices for oil and gas, Interfax reported last month.


Belarus's deputy prime minister, Andrei Kobyakov, said last night his country considered its position to be "justified."

Belarus has "a special history of these relations" with Gazprom, he said.

Belarus Foreign Minister Sergei Martynovis said on Feb. 6 the former Soviet state seeks to attract foreign investors to its energy and petrochemical industries and expand economic ties with the European Union and Russia.

"We are opening the economy to foreign investment," Martynov said.

Belarus wants better ties with the EU after Lukashenko's government was dubbed "Europe's last dictatorship" in 2005 by the administration of then-U.S. President George W Bush.

While the government doesn't want Belarus to become a candidate to join the EU, "we work to have a much better relationship with the European Union than we had before," Martynov said. "We continue to have a dialogue with the European Union on certain political issues, but that dialogue is not an obstacle in itself to economic cooperation."

Russian Warning

EU foreign ministers said in November that Belarus's release of political prisoners in 2008 increased possibilities for cooperation. Belarus hasn't made much progress on human rights, including crackdowns on political demonstrations and hampering opposition groups, the ministers said in a statement.

A year ago, Russian Foreign Minister Sergei Lavrov questioned the EU's bid to establish closer ties with countries once controlled by the Kremlin, warning the bloc against meddling with ex-Soviet satellites.

Russian leaders are irked by the EU's embrace of six former parts of the Soviet Union -- Belarus, Ukraine, Moldova, Georgia, Armenia and Azerbaijan -- that lie between the expanded 27- nation bloc and Russia.

--With assistance from Ben Farey in London and Maria Levitov in St. Petersburg. Editors: Chris Kirkham, Tasneem Brogger

To contact the reporter on this story: Lyubov Pronina in Moscow at

To contact the editor responsible for this story: Willy Morris at


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