BELARUS NEWS AND ANALYSIS

DATE:

02/08/2007

Gazprom Says Belarus

A WSJ NEWS ROUNDUP

MOSCOW -- Russian gas monopoly OAO Gazprom will ensure all its paying customers continue to receive deliveries in full despite its reduction of supplies to Belarus, a senior official said yesterday.

Gazprom said earlier yesterday it would cut supplies to Belarus by 45% starting Friday in reaction to Belarus's failure to pay in full for deliveries of gas so far this year, in accordance with a new contract.

"Financially they have all possibilities to pay us...so we don't see any sound reason why they don't," Ilya Kochevrin, head of communications at Gazprombank, a majority-owned subsidiary of Gazprom, said.

As European officials voiced concern, the world's biggest gas producer sought to ease fears the move could reduce gas flowing through a pipeline that handles more than 20% of Russia's exports to Europe.

Mr. Kochevrin suggested Gazprom would increase the flow of gas through its main export route through Ukraine, if needed, to guarantee stable deliveries to customers in Central and Western Europe.

The news came after Russia's former Soviet neighbor missed a July 23 deadline for payment of nearly $500 million. Belarus last year agreed to pay $100 per thousand cubic meters of gas this year, more than double the previous price but still far below the European level of about $260. To ease the impact, Gazprom agreed to allow Minsk to pay only $50 for the first half of the year, with the remainder payable last month. But talks in Minsk last week on that debt, which Gazprom put at $456 million, ended without agreement.

"Belarus is currently preparing its proposals for Gazprom to resolve this situation," said Andrei Zhukov, an aide to the Belarus Energy minister.

Source:

http://online.wsj.com/article/SB118601545140285548.html?mod=googlenews_wsj