BELARUS NEWS AND ANALYSIS

DATE:

27/08/2007

Belarus Settles Gas Debts with Kremlin

Belarusian president Alexander Lukashenko may be - as the Bush administration calls him - "the last dictator in Europe." But Lukashenko is no match for Gazprom, a fact made clear in early August when he agreed to pay Russia a $460 million gas bill to avoid Gazprom's threatened cutoff.

The Russian gas giant said it would halve its gas shipments to Belarus if it did not receive payment. Lukashenko apparently turned to his ally, Venezuelan president Hugo Chavez, for help in raising the money to pay Gazprom.

The incident is the latest in the increasingly fractious relationship between Belarus and Russia. Late last year, Gazprom and Belarus agreed on a deal that obliged Belarus to pay $100 per 1,000 cubic meters of gas, more than double the previous $46 rate. As part of that deal, Belarus agreed to give Gazprom an option to buy a 50 percent stake in its local gas transportation company, Beltransgaz. Though the $460 million payment momentarily settles the gas fight, don't be surprised if additional pricing conflicts arise in the future between Belarus and Gazprom.

Source:

http://www.energytribune.com/articles.cfm?aid=613

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