Belarus demands revision of gas deal with Gazprom - deputy PM (Part 2)

MINSK. Aug 1 (Interfax) - Belarus insists on signing an addendum to the agreement on gas prices given a number of significant changes in circumstances, Belarusian Deputy Prime Minister Vladimir Semashko told a Friday press conference in Minsk.

"When the agreement was signed [on December 31, 2006] we relied on the Russian estimate that oil prices would decline. As there are articles in both Russian and Belarusian civil codes under which an agreement may be amended or severed given significant changes in circumstances we suggest either sitting down at the negotiating table and either severing the agreement which is unacceptable or supplementing it to reach a civilized solution [on the gas price for Belarus]," Semashko said.

Belarus and Russia are at the stage of talks, he said.

At Gazprom (RTS: GAZP) Interfax was told that the gas price for Belarus is calculated according to a formula, which is most comfortable in Gazprom gas deliveries to CIS and European countries.

"While at the beginning of 2008 the price of gas for Belarus was $119 for 1,000 cubic meters, now we have switched to $127.9 which will remain until the end of the year," he said.

Semashko said that if the gas agreement and its formula of pricing gas are applied, Belarus may face a steep rise in prices because fuel prices are soaring throughout the world.

He drew attention to the fact that the new Russian Cabinet intends to put off the transition to the principle of equal profitability of the gas price on all markets as of January 1, 2011 to 2014-2015. Russia believes that "if the strategy declared earlier is followed, Russia will have to double fuel prices as of January 1, 2011 which will be disastrous for it," Semashko said. "Russia will slow down the motion and we can come up with the argument - why can a price be significantly raised for our small country?" he said.

He said that last week Belarus and Russia signed an additional agreement raising the rate of gas transit across Belarus. Having no price Belarus nevertheless fulfilled all the transit obligations, he said. "Gazprom paid Belarus $105 million in the first half for the transit. When Gazprom made the transit payment, we used the money to cover the difference between $119 for 1,000 cubic meters of gas for Belarus in the first quarter and $128 in the second," he said.



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