BELARUS NEWS AND ANALYSIS

DATE:

01/08/2007

Belarusian bank offers credit to Beltransgaz to pay its debt

MINSK, August 1 (Itar-Tass)-- Belarus' Belgazprombank has offered a syndicated credit of 0.5 billion U.S. dollars, made up mainly of Russian money, to bail Beltransgaz out of its indebtedness to Russia's Gazprom for current gas supplies.

"We are ready to give Belgazprombank up to 0.5 billion U.S. dollars. It's a probability and it has the form of a concrete offer," bank board chairman Viktor Babariko told Itar-Tass on Wednesday.

"We have already compiled a list of loan participants, mainly Russian, and are now collecting documents. The only question is how much Beltransgaz will want to take out of this sum," he added.

Earlier in the day, Gazprom said warned that it would cut gas export to Belarus within days due to non-payments.

"The daily amount of gas supplied to Belarus under the contract will be reduced proportionately to the real payments, by 45 percent, as of 10:00 Moscow time on August 3. Under the applicable contract the Belarussian gas pipeline system Beltransgaz is obliged to guarantee free transit of Russian gas to third countries," Gazprom said in a news release.

Since the beginning of the year, Belarus has been paying for 55 percent of gas it consumes and hopes to reschedule the debt or repay it with the aid of a credit from Russia. But no progress has been reached at the talks so far.

Belarus hopes to solve the gas problem as soon as possible, Andrei Zhukov, the Belarussian energy minister's adviser, said.

In his words, "Belarus will take measures to settle the situation." He declined to elaborate. Belarus' government and Beltransgaz also refused to give any comments.

According to the Gazprom press service, in the first half of 2007 Belarus paid for 55 percent of gas supplies and had to pay the rest before July 23 while starting to pay 100 percent from July 1."

"The debt had reached 456.16 million U.S. dollars in January-June 2007. In violation of the existing contract Belarus did not pay its debt and gave no guarantees," the press service said.

On December 31, 2006 Gazprom and Beltransgaz concluded a gas supply and transit contract for 2007-2011. The price of Russian gas effective throughout 2007 was set at 100 U.S. dollars per 1,000 cubic metres. The gas pricing formula to be used as of January 1, 2008 will be identical to that already applied to Russian gas export to Europe.

Under that contract Belarus was to pay for 55 percent of gas supplies in the first half of 2007, and for 45 percent, by July 23. After July 1 Belarus was expected to pay for gas in full.

"Belarus enjoys unprecedentedly favourable conditions to purchase Russian gas. It also has enough time to adjust itself to the new price," Gazprom said.

Meanwhile, Belarus continues to increase its gold reserves. According to the presidential press service, as of July 12 "foreign exchange revenues increased by 19.8 percent in the first six months of 2007 as compared to the same period of last year."

Gold reserves increased by 1.189 billion U.S. dollars and reached 2.942 billion U.S. dollars.

Source:

http://www.itar-tass.com/eng/level2.html?NewsID=11762318&PageNum=0