BELARUS NEWS AND ANALYSIS

DATE:

07/08/2007

Belarus to pay Gazprom debt in full on Wednesday

MINSK, Aug 7 (Reuters) - Belarus said it will pay off the remainder of its $456 million debt to Russian gas monopoly Gazprom by Wednesday, a government official said on Tuesday after the country cleared $66 million more of the debt.

Gazprom threatened Belarus, a transit country for Russian gas to the European Union, with supply cuts when Minsk said it could not pay the debt accumulated since January, when Gazprom doubled gas prices to $100 per 1,000 cubic metres. "On Tuesday, Belarus paid Gazprom another tranche of debt of $66 million, and it will pay the last part on Wednesday," said a government official, who declined to be identified.

On Monday, state television said Belarus had already cleared some $300 million of debt. It made its first payment last Friday, staving off for a week any supply cuts. Analysts have said Belarus can just about pay the full price after having its gas supplies subsidised by Moscow for years, but also note that it is running external deficits that need to be financed either with borrowing or internal investment.

First Deputy Prime Minister Vladimir Semashko, quoted by BelTA news agency, said the government would pay what it owed in full.

"This is difficult for us, but honour and reputation require our government to be above that," BelTA quoted him as saying.

Though Belarus has had to absorb the shock of doubled gas prices, it still pays much less than Gazprom's European clients, who are charged over $250 per 1,000 cubic metres.

Source:

http://asia.news.yahoo.com/070807/3/360dz.html