BELARUS NEWS AND ANALYSIS

DATE:

22/12/2008

Kremlin: Belarus, Russia reach gas supply deal - Summary

Author : DPA

Moscow - Belarussian President Alexander Lukashenko in Moscow on Monday struck a deal for privileged prices on Russian gas deliveries in 2009 in talks that reportedly included a request for a 3.5-billion-dollar credit to the flailing Soviet-style economy. The head of the Kremlin press service Natalya Timakova made the statement after Lukashenko met with his Russian counterpart Dmitry Medvedev. She did not give any details on the agreement.

The announcement should soothe concerns among European consumers over fuel supplies coming amid a similar pricing dispute between Moscow and Ukraine, another key transit country for Russian oil and gas to Europe.

A Russian newspaper reported Monday that Belarus could back Moscow's recognition of Georgia's two breakaway regions in exchange for favourable gas prices.

"I want to dispel the impression that we are begging for the Kremlin for something today," Lukashenko said ahead of the talks.

"But if the Belarussian economy halts, it will mean 10 million partly or wholly jobless people will flow into Russia. ... In this we want support from the Russian Federation, because this would be beneficial for both Belarus and Russia," he told journalist Monday.

Russian Deputy Finance Minister Dmitry Pankin was quoted by Russian news agencies earlier Monday as saying Belarus had filed a request for 100-billion-rubles (3.5 billion dollars) in return for switching to the ruble in bilateral trade between the two countries.

He did not say when the petition had been made.

Russia has been campaigning to make a transition from dealing its oil and gas trade in dollars to rubles in an aim to bolster the ruble and to eliminate the need for energy purchasing countries to hold high dollar reserves for this purpose.

Belarus' centralized economy is heavily reliant on subsidized imports of Russian oil and gas.

Belarus officials have said that they are ready to pay 140 dollars per 1,000 cubic meters of Russian gas while Russian officials have said the price may rise as high as 240 dollars. Belarus currently pays about 128 dollars for supplies.

Russian daily Kommersant cited unnamed Russian Foreign Ministry officials as saying Moscow will ask its ally Belarus to recognize South Ossetia and Abkhazia.

Following Russia's war with Georgia in August, the Georgian regions of South Ossetia and Abkhazia declared themselves independent with Moscow's backing. Since then only Nicaragua has recognized the two republics.

The newspaper also said Minsk could offer to sell Moscow a controlling stake in its state gas pipeline firm Beltransgaz, which controls key transit routes to Europe. The Russian state export monopoly Gazprom now owns a 25-per-cent share.

"The Belarussian President indeed has something to offer his Russian counterparts both in political and economic terms," Kommersant wrote Monday.

Lukashenko was in Moscow earlier this year to request 2-billion- dollars in loans to support Belarus' struggling economy.

Belarus is currently in negotiations with the International Monetary Fund for another loan of 2 billion dollars, but is seeking more funds from an unlikely donor, the United States, which has in the past dubbed Lukashenko "the last dictator in Europe."

"It is very hard for us now, and we turned to the Americans for help. ... I think 5 million dollars is not a problem for them," Lukashenko said in an interview published on Friday.

The Belarussian leader considers Moscow his strongest ally, and has for years been in talks, though largely symbolic, about merging with Russia.

But Lukashenko had shied away from supporting Russia's decision to recognize Georgia's breakaway regions since August, frustrating Moscow's attempts to gain backing among post-Soviet allies.

Source:

http://www.earthtimes.org/articles/show/247442,kremlin-belarus-russia-reach-gas-supply-deal--summary.html

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