BELARUS NEWS AND ANALYSIS

DATE:

04/01/2007

EU: Belarus gas deal positive

BRUSSELS, Belgium (Reuters) -- A gas pricing deal between Belarus and Russia is positive and steps taken by European Union countries should be sufficient to ensure sufficient gas supplies this winter, the EU said on Thursday.

A spokesman for the executive European Commission, Ferran Tarradellas Espuny, also told a news briefing he did not think a decision by Belarus to impose duty on Russian oil exports in transit through the country would affect EU supply security.

The EU's Gas Coordination Group gave a "positive" assessment on Thursday of a last-minute gas pricing deal on December 31 between Russian gas monopoly Gazprom and Belarus outlined to it by the Belarus ambassador, a statement said.

The group, chaired by the Commission and comprising EU states as well as industry and consumer representatives, also assessed steps by EU members to ensure stable gas supplies.

"The general impression is that measures taken are adequate, but we have considered we have had a mild winter," Tarradellas Espuny said.

"However after the crisis between Belarus and Russia this winter, and last winter the crisis between Russia and Ukraine, all member states have emphasized the need for strong cooperation ... for the supply of energy in general."

EU worries about Russia's reliability as an energy supplier were raised in January last year when a pricing dispute between Moscow and Ukraine briefly disrupted gas supply to the bloc.

The European Union obtains about a quarter of its gas from Russia and about 20 percent of this amount comes via Belarus.

Tarradellas Espuny said the Commission was following closely a decision by Belarus to impose duty on Russian oil exports and hoped it would not have a negative effect on supply between Russia and Belarus.

"We expect certainly this is not going to have a negative impact on the security of supply of oil to the European Union," he said.

"We expect that the differences between the two parties are going to permit consumers to expect oil supplies at the prices that have been previously contracted."

Russia said on Thursday it did not expect the escalating trade row to disrupt crude oil supplies to Europe.

"Russia has on many occasions proved itself to be a reliable supplier and there is no threat to deliveries," Kremlin spokesman Dmitry Peskov said in response to a Reuters inquiry.

Belarus trans-shipped 90 million tonnes (1.8 million barrels per day) of Russian oil last year through the Druzhba trunk line to refiners in Poland and Germany, and through a southern spur to Slovakia, the Czech Republic and Hungary.

Belarus slapped big new charges on Russian oil crossing its territory on Wednesday in retaliation for Moscow cutting subsidies on energy supplies.

Market watchers said the oil transit duty would not affect world oil prices or cause shortages but it was likely to cause short-term disruption to the supply chain as refiners in Poland and Germany looked for cheaper alternative supplies of crude.

Source:

http://edition.cnn.com/2007/BUSINESS/01/04/gas.belarus.russia.reut/