BELARUS NEWS AND ANALYSIS

DATE:

27/12/2006

EU calm over threat of gas cuts in Belarus-Russia energy row

(BRUSSELS) - The European Commission played down on Wednesday prospects that a price row between Russia's Gazprom and Belarus would threaten gas supplies in Europe and expressed confidence that it could deal with any cuts.

"We are not very concerned. There is no crisis, at least not yet," said commission spokesman Amadeu Altafaj Tardio, after Belarus said that about 20 percent of Russian natural gas deliveries to Europe could be under threat.

"Our assessment is that the gas stocks in the European Union, in certain member states, are more than enough to face (any) crisis situation," he said.

Gazprom wants Belarus to pay more than double the current price for gas from Juanary 1, 2007 and is threatening to cut supplies if no deal is reached.

Belarus First Deputy Prime Minister Vladimir Semashko said on Wednesday that the continued transit of Russian gas across Belarus to clients in western Europe would depend on Gazprom agreeing to supply Belarus' domestic needs.

The price war closely resembles a standoff this time last year between the Russian gas monopoly and Ukraine, which saw supplies there cut on New Year's day with knock-on effects for European consumers down the supply line.

The crisis, during an exceptionally cold winter, exposed a lack of any real European Union energy policy and awakened the bloc to the political power of natural resources.

"The lessons ... have been learned by member states, not only in terms of stocks but also in terms of the importance of European solidarity," the commission spokesman said.

He said that Austria, Britain, Germany and the Netherlands had sufficient stocks of gas to deal with any problem that might arise.

"There is a diversity of suppliers but also of production," he said.

The EU is heavily dependent on Russian energy.

It relies on Russia for more than 40 percent of its gas imports -- about 80 percent of which transits through Ukraine and some 20 percent through Belarus -- and over 30 percent of its oil imports.

Source:

http://www.eubusiness.com/news_live/gazprom.271206