Russia Restores Gas Supply To Belarus As Payment Dues Settled

(RTTNews) - A potential threat to European gas supply and bilateral relations between Russia and Belarus were averted Thursday, as both countries settled their payment dues.

Russia's state-controlled gas monopoly Gazprom said it resumed supplies of natural gas to Belarus in full after receiving payment for outstanding bills, while Belarus said it had received payment from Gazprom in transit fees for using its territory for delivering gas to Europe.

Russia's ITAR-Tass news agency quoted Gazprom's CEO Alexei Miller as saying that "From 10 a.m., Gazprom resumed in full its gas supplies to Belarus, but the matter is not settled completely."

Belarus had threatened to cut transit of Russian gas on Thursday if Moscow did not pay off the debt. And Lithuania was the first to suffer from the spill over.

It experienced a 30 per cent reduction in the supply of Russian gas it had been receiving through transit pipelines across Belarus.

The Baltic country depends heavily on Russian gas supplied through the Belarus-Kaliningrad pipeline, which takes the fuel further into Poland and Germany. However, neither of the two countries reported any reduction in their gas supplies on Wednesday.

The European Commission had expressed concern that the dispute could affect gas supplies to Europe.

Guenther Oettinger, the bloc's energy commissioner, had requested officials of both the countries not to take Europe "hostage in this dispute."

Like Ukraine, Belarus remains heavily dependent on Russia to meet its energy needs, but only a less proportion of Russian oil and gas exports to Europe pass through that country.

Ukraine transits about 80 per cent of Russian gas exported to other European countries, while the rest flows through Belarusian pipelines.

As directed by President Dmitry Medvedev, Gazprom introduced on Monday a regime of limiting supplies of Russian gas to Belarus by 15 per cent. Gazprom chief Miller had warned that the gas cuts would be increased to 85 per cent in the coming days if a solution to the conflict was not found.

By Wednesday, Russia had reduced gas supplies to Belarus by 60 per cent.

Gazprom blocked its pipelines saying that Belarus owed about $192 million after failing to pay increased prices, while Minsk challenged the Russian claim and refused to pay.

Later, Belarus' first Deputy Premier Vladimir Semashko said that his country would settle the debts within two weeks.

He said Russia owed Belarus $217 million in transit fees for using its territory for delivering gas to Europe, and added that if Russia's transit fees debt was paid off, the Belarus government was "prepared to pay 187 million dollars of our debt for gas."

Sergei Kupriyanov, a spokesman for Russia's gas monopoly, said on Thursday that Gazprom had paid Belarus $228 million for the transit fees.

Russian Prime Minister Vladimir Putin and Belarusian Foreign Ministry expressed regret over the dispute.

Putin says the neighboring former Soviet Republic is "receiving Russian natural gas at the lowest possible price."

Russia hiked the price of gas supplied to Belarus from $150 per 1,000 cubic meters of gas last year, to $169.20 in the first quarter of 2010 and $184.80 in the second. But Belarus continued to pay at $150.

Gazprom said at this rate it could owe at least $500 million by the end of the year.

It was the latest in a series of gas-supply disputes between Russia, which is maintaining its influence in the European and Central Asian energy sector, and its neighbors, causing worry for Europe.

In January last year, Russia halted all gas shipments to Europe via Ukraine for two weeks amid a dispute over unpaid bills and new prices, resulting in a fuel crisis in European countries in the height of winter.

Under an agreement signed in April, Ukraine extended the lease of its port for Russian Black Sea Fleet in exchange for a dramatic cut in the price of natural gas it buys from Russia.


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