Gazprom Resumes Belarus Gas Supplies on Mutual Debt Payments

By Anna Shiryaevskaya and Anton Doroshev

June 24 (Bloomberg) -- OAO Gazprom, the world's biggest gas producer, resumed supplies to Belarus in full today after both sides paid bills, at levels lower than demanded.

"There are no problems that could hinder gas transits," Sergei Kupriyanov, a spokesman for the Russian gas export monopoly, told reporters today in Moscow.

Gazprom paid $228 million for past transit fees in line with their base contract rate, rather than the $260 million that Belarus was demanding, as no agreement to raise the price has been signed, Kupriyanov said. The company received $187 million from Belarus for past fuel deliveries, he said. Gazprom had demanded $192 million.

Belarus is giving Gazprom until 1 p.m. in Minsk for Gazprom's transit payment to arrive or will start cutting shipments to Europe, Interfax said, citing First Deputy Prime Minister Vladimir Semashko. Restoring full transit to Europe will take 8 to 10 hours, RIA Novosti said, citing Semashko.

The dispute over the debts lowered gas deliveries to Lithuania, a European Union member, as Gazprom cut deliveries for Belarus 60 percent by yesterday and accused the neighboring country of siphoning off 20 percent of EU exports. Gazprom supplies a quarter of Europe's gas, sending about 20 percent via Belarus and the rest across Ukraine.

Gas flows across Belarus to Lithuania, and Russia's Kaliningrad exclave on the Baltic Sea, dropped 40 percent at 4 p.m. in Vilnius yesterday, Lietuvos Dujos AB spokeswoman Sigita Petrikonyte-Jurkuniene said at the time.

Lowest Price

Belarus's debt arose as it continued to pay $150 per 1,000 cubic meters, demanding the right to pay Russian domestic prices. Gazprom set the price at about $184 in the second quarter, Kupriyanov said this week.

Prime Minister Vladimir Putin criticized Belarus for failing to pay on time or in line with its contract, saying the former Soviet republic receives gas at the lowest price in the region, in a meeting with Chief Executive Officer Alexei Miller and government officials broadcast on state television.

Putin said more talks are need after Belarus demanded transit fees for gas shipments that don't conform to contractual agreements. Belarus will consider the $228 million that Gazprom transferred as an 87 percent advance payment, RIA Novosti said, citing Semashko.

--Editors: Torrey Clark, Rob Verdonck


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