Belarus Slashes Gas Supply To Lithuania After Row With Russia

(RTTNews) - Lithuania claimed Wednesday it has experienced a notable 30% reduction in the supply of Russian gas it receives through transit pipelines across Belarus, signaling the spill-over of the ongoing Russia-Belarus dispute over pending payments into Europe.

Lithuania depends almost entirely on the Russian gas supplies it receives from the Belarus-Kaliningrad pipeline, which passes though Lithuania into Poland and then to Germany. However, both Germany and Poland did not report any reduction in their gas supplies on Wednesday.

The development comes just days after Belarus warned that countries further down the pipeline would be affected by the cut in gas supplies by Russia over the debt payment issue. It also made Lithuania the first European country to be affected by the Russia-Belarus dispute.

Lithuania's energy minister Arvydas Sekmokas said Wednesday that his country would import the gas it requires from neighboring Latvia, stressing that he did not expect to face "major problems" due to lower energy demand during summer months.

Earlier in the day, Russia announced that it was making further cut in the gas supply to Belarus due to its failure in settling pending gas debts. With Wednesday's cuts, Russia has now reduced gas supplies to Belarus by 60%, including the 15% cut made Monday and a further 15% on Tuesday.

Meanwhile, Belarus announced Wednesday that it has fully paid off its debts to Russian oil giant, with Belarus' First Deputy PM Vladimir Semashko stating that his country had borrowed $200 million and transferred $187 million to Gazprom "to clear the debt." However, Gazprom is yet to confirm the receipt of payment.

Earlier, Belarusian President Alexander Lukashenko had warned of a "gas war" with Russia, pointing out that Russia owed Belarus $217 million in transit fees for using its territory for delivering gas to Europe.

The Russian move to cut gas supplies to Belarus followed a warning issued by Medvedev last week that natural gas exports to the neighboring ex-Soviet Republic will be discontinued unless it paid off its gas debts within five days. Russian energy giant Gazprom claims that Belarus owes it about $192 million after failing to pay increased gas prices.

Russia increased the price of gas supplied to Belarus from $150 per 1,000 cubic meter last year to $169.20 in the first quarter of 2010 and $184.80 in the second. Belarus, however, continued to pay at the old rate of $150 per 1,000 cubic meter, prompting concerns from Gazprom that the former Soviet Republic could end up owing $500 million or $600 million by the end of the year.

Though Belarus proposed earlier to pay its dues with "machinery, equipment and various other products," Medvedev insisted that its neighbor should come up with hard cash -- and not goods -- to pay the bill as foreign payments could only be accepted in foreign currencies.

Despite being close allies, Russia and Belarus have had several rows in recent years, particularly over energy supplies. Like Ukraine, Belarus remains heavily dependent on Russia to meet its energy needs, and a considerable proportion of Russian oil and gas exports to Europe pass through its territory.

Earlier, Russia had cut gas supplies to Ukraine in January 2009 over Ukraine's pending gas debts. The move disrupted Russian gas supplies to Europe, which depends on supply of Russian gas through pipelines laid across Ukraine for most of its gas requirements.


Partners: Social Network