Lukashenko stops flow of Russian gas in payments row (Roundup)

Moscow/Minsk - Belarusian President Alexander Lukashenko ordered a stop Tuesday to the flow of Russian gas through Belarus, saying that Russian gas monopoly Gazprom owed 260 million dollars for transit fees for the first half of 2010, ITAR-Tass reported.

The move by Lukashenko came after Gazprom curtailed gas deliveries to Belarus by 30 per cent of the usual daily flow, saying that Minsk had taken no steps towards paying off its 192 million dollars in debt.

Gazprom had already cut Belarus' gas supply by 15 per cent on Monday and threatened to cut it by as much as 85 per cent if Minsk didn't make good on a debt of 192 million dollars.

'I ordered the government to stop the transit of Russian gas through Belarusian territory until Gazprom pays its debt for transit,' Lukashenko said at a meeting in the Belarusian capital Minsk with Russian Foreign Minister Sergei Lavrov.

Meanwhile, Gazprom said it might employ observers to monitor the transit of gas by Belarus, as was the case in a gas dispute with Ukraine in 2009.

'We are preparing to launch a mechanism of observers, as we did with Ukraine,' said Alexander Medvedev, Gazprom's deputy chief executive. 'We'll make our best efforts and do everything possible and impossible to make sure that European customers are not affected.'

Gazprom spokesman Sergei Kupriynov said the company had received a letter Tuesday from Belarusian Deputy Premier Vladimir Semashko threatening to siphon off gas from the pipeline system if Russia further reduced the supply of gas to Belarus.

'It's hardly possible to constructively solve the problem by taking such a tone and making such threats,' Kupriyanov said at a news conference in Moscow.

Kupriyanov said the letter from Semashko 'contained no substantive proposals.'

In Ukraine, the government said it could increase the delivery of gas to make up for any shortfall from Belarus.

'We have the capability to pump an additional 20 to 30 billion cubic meters (per year),' Premier Nikolai Azarov said.

Valentin Zemlyanski, an expert on the energy sector, told ITAR- Tass that the conflict between Belarus and Russia wouldn't have international consequences, as had the dispute between Ukraine and Russia in January 2009.

He said that an interruption of gas in the summer would not cause the same difficulties as in the winter and that it was unlikely European consumers would feel the effect this time.

Gazprom on Monday rejected an offer by Minsk to settle the gas bill in two weeks. Lukashenko on Tuesday reiterated his appeal for more time.

'We asked for a credit. We have money, but it's not available - we can't take it from budget or hard-currency reserves. Give us two weeks to get 192 million dollars, but Russia said, 'We won't wait'.'

In the past, gas disputes between Russia and Ukraine left Europe in the cold. But the European Union's executive said Tuesday this was not a danger with Belarus, as only 6.25 per cent of the EU's total gas consumption is sourced from that country.

Last week Gazprom had announced its aim of reducing by 85 per cent its gas deliveries to Belarus, with Minsk then threatening over the weekend to tap into the transit pipelines transporting gas to western Europe.

Gazprom said that if Belarus took such action, the company would pump its gas via Ukraine into Poland, circumventing Belarus. According to Russian media, Minsk's opposition to Russia's initiative of a three-way customs union with Kazakhstan is at the centre of the current dispute.

Belarusian Foreign Minister Sergei Martynov also met Tuesday with Lavrov in Minsk, and said that Belarus is seeking the creation of a full-fledged customs union with equal rights for all parties.


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