BELARUS NEWS AND ANALYSIS

DATE:

13/11/2006

Belarusian president demands fair price for turning gas transport network over to Russia

The Associated Press

MINSK, Belarus: President Alexander Lukashenko on Monday raised the stakes in Belarus' growing spat with Russia over natural gas prices, saying Moscow should pay market prices if it is still interested in taking over part of Belarus' gas transport system.

Moscow and Minsk are at loggerheads over gas prices, with Russia seeking to hike prices fourfold to US$200 (?155) per 1,000 cubic meters - a hike that would dramatically pinch Belarus' inefficient Socialist-style command economy.

Moscow, which has raised prices for several former Soviet republics, has indicated it could compromise if Belarus hands over 50 percent of its pipeline transporting Russian gas to western Europe.

Lukashenko, who traveled to Moscow to meet with President Vladimir Putin last week, said the Belarusian national gas transport company, Beltransgas, could be worth US$17 billion (?13 billion) - far more than the US$800 million (?620 million) price Russian gas monopoly OAO Gazprom said the company was worth.

He has said Belarus should not pay more for gas than what Ukraine and Armenia pay. Armenia currently receives gas at US$100 (?78) per 1,000 cubic meters.

"We are ready to form a joint venture with Russia," Lukashenko said. "And since Russia is talking about supplying oil and gas to Belarus at market prices, we will be doing this under market conditions."

Lukashenko and Putin signed a deal in 2001 setting up the joint venture, but completion of the deal has been tied up as Gazprom has sought to raise gas prices.

After Friday's meeting, the Kremlin issued a statement saying that economic ties between Russia and Belarus must be built on "mutually beneficial terms based on market principles."

Source:

http://www.iht.com/articles/ap/2006/11/13/business/EU_FIN_Belarus_Russia_Gas.php