BELARUS NEWS AND ANALYSIS

DATE:

28/12/2006

Ukraine can raise Russian gas transit if no deal with Belarus

KIEV, December 28 (RIA Novosti) - Ukraine's energy minister said his country is ready to increase transit of Russia's Europe-bound gas if Moscow fails to sign a gas deal with Belarus over a price dispute.

Amid continuing gas price debates, Russia's gas monopoly Gazprom has said it will cut off supplies to Belarus if no contract is concluded for next year. Minsk replied it would then refuse to sign a contract on Russian gas transit to Europe via Belarus, Russia's leading business daily Kommersant said Thursday.

Ukraine's Fuel and Energy Minister Yuriy Boiko said: "In conflict situations, we can help European consumers by increasing transit" across Ukrainian territory.

Kommersant said Thursday that Ukrainian pipelines, which currently pump 123 billion cubic meters of gas a year, could only increase the figure marginally. The newspaper's source in Gazprom said that gas transit via Ukraine could only be raised by 4-5%, which represents about 5-6 billion cu m of additional gas to Europe.

Russia and Belarus are currently involved in complex negotiations over the 2007 gas price for Minsk, which has been paying a discounted rate until now. The dispute is reminiscent of a gas spat with Ukraine early this year when Gazprom suspended gas deliveries, affecting consumers in Europe. Ukraine later admitted it had to tap Russian gas during the brief blockade.

The disruption of Russian gas deliveries to the European Union, which imports more than 25% of its oil and natural gas from Russia through Ukrainian pipelines, cast doubt on Russia's reliability as a supplier.

The current gas deal between Belarus and Gazprom, the sole gas supplier to the ex-Soviet republic, expires in three days.

Gazprom's Chief Executive Alexei Miller said Wednesday his company sent official warnings to its partners in Western Europe about the situation with Belarus. "Today we have sent warning letters to our partners in Lithuania, Poland and Germany about the current situation with gas deliveries to Belarus," he said.

The Russian gas giant has proposed that Belarus pay $75 per 1,000 cubic meters in cash plus $30 in shares of the Belarusian government-owned pipeline company, Beltransgaz. Belarus said it was only ready to pay $75 in cash.

Belarus's First Deputy Prime Minister Vladimir Semashko Tuesday called Gazprom's policy a provocation and said the country would proceed from the current contract if no new contract was signed by January 1, 2007.

Gazprom's spokesman Kupriyanov said the statement was tantamount to a declaration of intent to siphon off gas from Europe-bound pipelines.

"Statements that Belarus will stick to the 2006 price of $46.68 per 1,000 cubic meters until the [new] contract is signed can be described as intent to tap Europe-bound gas in the absence of a contract," he said.

Kupriyanov said Russia, which has moved to bring gas prices for post-Soviet nations to average European levels, had made "unprecedented concessions" to Minsk, offering it the most beneficial terms among its former Soviet allies.

Source:

http://en.rian.ru/russia/20061228/58046610.html