BELARUS NEWS AND ANALYSIS

DATE:

14/12/2006

Russia threatens gas supply cutoff unless Belarus, Georgia pay more - report

MOSCOW (AFX) - Russia is preparing to cut off natural gas supplies to neighbouring Belarus and Georgia unless the two former Soviet republics agree by the year-end to pay much higher prices in 2007, the Financial Times reported.

Action against Belarus could affect supplies to Poland and Germany since a transit pipeline runs across the republic.

Gazprom has made clear it is prepared to reduce price increases in exchange for stakes in the republics gas distribution networks. It is pushing hard for 50 per cent of Beltransgaz, the Belarusian company that also controls the export pipeline across the country, although Russia and Belarus differ sharply over its value, the newspaper added.

Sergei Kuprianov, a spokesman for Russian gas giant Gazprom, told a radio station he could not exclude a cut-off to Belarus, although he added: We would hate to see that.'

But it is understood Gazprom is preparing for a worst-case scenario if agreements are not reached.

Gazprom briefly cut gas to Ukraine last year in a similar pricing dispute.

Western-leaning Georgia sees the threat as politically motivated, and says it can replace Russian gas with supplies from neighbouring Azerbaijan and from Iran.

But Russia is reducing its gas exports to Azerbaijan next year, limiting the latter's scope to re-export surpluses to Georgia, the FT noted.

Source:

http://www.hemscott.com/news/latest-news/item.do?newsId=38287485966662