BELARUS NEWS AND ANALYSIS

DATE:

26/12/2006

Russia Tells Europe Possible Gas Cuts to Belarus Won't Effect Supplies

MosNews

Russia's state-controlled gas monopoly Gazprom told its Western European clients not to worry about possible consequences of gas cuts to Belarus, which continues to insist on paying below-self-cost prices for Russian gas. Gazprom has taken into account Ukrainian experience and cuts in deliveries to Belarus won't hamper supplies to Europe.

As MosNews has reported, Gazprom has suggested that next year Belarus starts paying a higher price for Russian gas. The current price paid by Belarus equals the price of Gazprom's deliveries to customers in neighboring Smolensk region and is set at about $50 per 1,000 cubic meters. Gazprom first wanted Belarus to start paying $200 per 1,000 cubic meters but on Monday the Russian gas monopoly agreed to lower the price to $80 in exchange for 50 percent stake in state-controlled gas transportation system Beltransgaz. However, the Belarusian President Alexander Lukashenka still insists on paying subsidized price of $50 per 1,000 cubic meters. Gazprom has already warned Belarus that gas deliveries would be stopped on Jan. 1, 2007, if no agreement is reached by then. That has prompted the Russian company's European customers to remember the first days of January 2006, when Gazprom cut deliveries to Ukraine over the same price conflict, disrupting gas supplies to Europe, which was suffering from extremely cold winter.

However, the Russian monopoly said that Ukrainian experience has been taken into account. It said that extra gas reserves have been accumulated in storage area in Germany and the Baltic States to guard against possible cuts to Belarus and reduced gas transit to Europe.

Source:

http://www.mosnews.com/money/2006/12/26/europegas.shtml

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