BELARUS NEWS AND ANALYSIS

DATE:

02/08/2007

Belarus to pay Russia to avoid gas cut-off

by Tatyana Kalinovskaya

Belarus promised on Thursday to pay nearly half a billion dollars to Russia's Gazprom to avoid a gas cut-off, while Gazprom expressed confidence a deal could be reached before the Friday deadline.

Belarus, a key transit state for Russian gas imports to western Europe, had fallen behind by 460 million dollars (337 million euros) in payments for Russian gas, prompting a warning from Gazprom it would slash deliveries by half from Friday.

In an effort to avert the crisis, Belarussian President Alexander Lukashenko said Thursday that Minsk would pay the full sum from national currency reserves.

"I have ordered the government to dip into our reserves and pay the 460 million dollars for Russian gas," he was quoted as saying by the presidential press service.

"Let them take it and calm down," Lukashenko said.

Gazprom had said on Wednesday that Belarus' failure to pay gas bills would force a reduction in supplies by 45 percent from Friday, prompting expressions of concern from the European Commission.

Following Lukashenko's announcement, Gazprom expressed confidence that a deal could be reached before the Friday deadline.

"We are of course reassured by the announcement from the Belarussian side today that they are ready to pay their gas debts," Gazprom spokesman Sergei Kupriyanov said on NTV television.

"Tomorrow we will continue contacts with Beltransgaz," he said, referring to Belarus' state gas pipeline operator. "The time before 10:00 am (0600 GMT), when we are planning to cut supplies, is enough to resolve this question."

The latest energy crisis between Russia and one of its ex-Soviet neighbours renewed European concerns about how such disputes can affect European energy supplies.

The European Commission responded by calling for a meeting next week of the EU's gas coordination group, saying in a statement: "The Commission believes that a safe and undisturbed supply of energy is of key importance for Europe's economy."

A similar dispute over gas prices between Russia and Ukraine, another key transit country, prompted cut-offs last year that hit supplies to western Europe and sparked a wide debate about growing reliance on Russian energy.

Belarus, a former Soviet republic located between Russia and Poland, is the transit corridor for 20 percent of the gas Russia ships to western Europe.

Lukashenko, who has few Western allies due to his authoritarian rule, cast his country as a victim of Russian bullying.

"Russia doesn't just wants to privatise a few enterprises, it wants to take them for free. They want to privatise the whole country," he said.

"Of course we are stripping our reserves bare, but our kind friends, including (Venezuelan President) Hugo Chavez, have said they're ready to help us with credit on good terms."

Minsk and Moscow have repeatedly clashed in recent years as Gazprom has sought control of Belarussian gas infrastructure and Belarus has tried to hold on to steep subsidies for Russian gas.

Gazprom more than doubled gas prices to Belarus to 100 dollars (73 euros) per 1,000 cubic meters on January 1, and in May, it won a deal to acquire 50 percent of Belarus' national pipeline operator for 2.5 billion dollars.

Source:

http://www.france24.com/france24Public/en/administration/afp-news.html?id=070802170152.n8wmnnti&cat=null

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