RUSSIA: Gazprom to halve gas to Belarus in debt row

Russia's gas exports monopoly Gazprom will almost halve supplies to Belarus from Friday (August 3) after failing to reach a deal with Minsk over a $456 million energy debt, Gazprom said on Wednesday (August 1). The world's largest gas producer, which supplies a quarter of Europe's gas, reassured the rest of Europe it would continue to pump gas exports across Belarus. It said it planned to notify its customers in over 20 European countries about the move. Gazprom's spokesman Sergei Kupriyanov told reporters that supplies would be cut by approximately 21 million cubic metres a day from 10am local time on August 3, equivalent to 45 percent of the daily usage in Belarus. At the same time Gazprom, he said, would "fully maintain the volume of our transit supplies to third countries" which includes Lithuania, the Kalinngrad region, Ukraine, Poland, and Germany, via Belarus. Gazprom's statement echoed previous conflicts between Russia and its neighbours, Belarus and Ukraine, which led to substantial gas and oil supply reduction to Europe, underlying its heavy dependence on Russian energy resources. During previous disputes, Gazprom repeatedly accused Belarus and Ukraine of siphoning off gas from its transit pipelines. Both denied stealing gas but they also argued they could not cut supplies to the population during cold winter months. A spokesman for Belarus' energy ministry confirmed it had received the warning but declined to say whether a quick deal could resolve the situation. Belarus has asked Russia for more time to pay the bill and is seeking to borrow money from Moscow, even though economists and officials reckon Minsk has enough cash on hand to cover the cost of dearer energy imports. Gazprom more than doubled prices at the start of the year after a long pricing dispute with Minsk. That row was eventually resolved on terms that Belarus' long-serving president and, until recently, pro-Moscow loyalist, Alexander Lukashenko, has since fiercely criticised. Belarus now must pay $100 per 1,000 cubic metres of Russian gas -- up from the old price of $46 that was heavily subsidised by Moscow - but was given a six month grace period during which it was allowed to pay half the price. Belarus has signed a contract to import 21.5 billion cubic metres of gas from Russia this year.

ITN Source | August 1, 2007

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