Russia resumes gas supplies to Belarus

By Courtney Weaver in Moscow

Russia resumed gas flows to Belarus on Thursday after Gazprom, Russia's gas monopoly, said it had received payment for four months of gas deliveries, ending a three-day stand-off that had seen supplies cut by 60 per cent.

But relations between the two sides remained tense as Moscow warned that the Russian region of Kaliningrad was still experiencing gas disruptions and that the two sides had yet to resolve the question of transit fees.

Russia started cutting gas deliveries on Monday and by Wednesday were only supplying 40 per cent of the normal agreed amount.

Vladimir Putin, Russia's prime minister, on Thursday expressed regret over the conflict, saying that Moscow had always had "special relations" with Belarus. He called on Gazprom and the former Soviet republic to "clarify all issues which still remained contentious" in a "normal, friendly atmosphere".

While Gazprom confirmed that Belarus had settled the $192m debt it had owed the company for gas deliveries, Belarus countered that Gazprom had not upheld its end of the bargain to pay Belarus the entire $260m the country says it owes in transit fees.

On Thursday a representative for Beltransgaz, Gazprom's Belarusian gas customer, told reporters that it had only received $233m, or 85 per cent of the sum it says it is owed.

Alexei Miller, chief executive of Gazprom, said the Beltransgaz demand was outside the original contract, adding that Belarus had no legal recourse to threaten cutting off transit to Europe, as it did on Wednesday, and the Kaliningrad region, a Russian enclave situated on the Baltic Sea.

Mr Putin stressed his hope that Russia and Belarus would avoid any similar conflicts in the future. But he also took the opportunity to remind Russia's neighbour that while Ukraine had been able to secure better prices for gas deliveries by staging a similar dispute in January 2009, Ukraine still paid more for its gas than Belarus did.

"No one has lower prices for Russian natural gas [than Belarus does]," Mr Putin said.

He added that Russia was also not levying export duties on gas sent to Belarus, a loss of Rb1.2m ($39m) a year for the Russian budget.

While Belarus typically acts as Russia's closest political ally, it has made no secret that it expects financial help from Moscow in return, specifically in the form of oil and gas subsidies.

While the conflict is really a commercial one between Belarus and Gazprom, Mr Putin noted that members of the Kremlin had become involved.

"Several times I and [President Dmitry Medvedev] had to remind our Belarusian partners at the highest level about the necessity of fulfilling their debt - and there was no reaction," Mr Putin said.


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