BELARUS NEWS AND ANALYSIS

DATE:

25/12/2006

Gazprom wants Belarus pipeline co. assets as part of gas bill

MOSCOW, December 25 (RIA Novosti) - Gazprom [RTS: GAZP] has proposed that Belarus pay part of its natural gas price tag with shares in the company controlling Europe-bound pipelines, the Russian natural gas monopoly said Monday.

"Gazprom is ready to accept part of Belarus's payment for natural gas deliveries in cash - for example, $80 per 1,000 cubic meters in 2007, while the remainder could be covered with shares in Beltransgaz so that Gazprom would eventually control 50%," Gazprom's spokesman Sergei Kupriyanov said.

He also said Belarus's refusal to pay a fair market price for Russian natural gas jeopardizes energy supplies to the country.

Gazprom has been pushing for a gas price of $200 per 1,000 cubic meters for Belarus in 2007 against the current price of $46.68.

"Today, the Belarusian side has said again it will not pay a higher price for Russian gas than the Smolensk Region pay for it," Kupriyanov said in reference to a Russian region bordering Belarus.

He said Belarus's gas contract will expire in six days, adding it is the last state that has been buying Russian gas at low prices in 2006.

Gazprom signed three contracts Friday for the supply of 1.1 billion cubic meters of gas to Georgia in 2007 at $235 per 1,000 cubic meters.

Kupriyanov said earlier the new price reflects the company's strategy to apply market mechanisms to pricing gas in its trade with the Commonwealth of Independent States (CIS), a loose confederation of former Soviet republics.

Member states currently pay no more than $110 per 1,000 cubic meters of gas, and Gazprom would like to bring its CIS prices in line with the average price for Western European exports of $250 per 1,000 cubic meters.

Earlier this year, Gazprom signed an agreement on new export prices for Ukraine - the main transit route for Russian gas to Europe - after a pricing dispute between the two post-Soviet nations led to massive cuts of deliveries to Kiev and consequent disruptions of Europe-bound exports.

Source:

http://en.rian.ru/business/20061225/57793232.html

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