BELARUS NEWS AND ANALYSIS

DATE:

31/03/2006

Gazprom steps up pressure on Belarus to sell gas pipeline stake - report

MOSCOW (AFX) - Gazprom is putting increased pressure on Belarus to sell it a 50 pct stake in the Beltransgaz gas pipeline, and is linking the issue to the threat of higher gas prices, following the re-election of hardline President Alexander Lukashenko of the former Soviet state, Kommersant daily reported.

Gazprom chief executive Alexei Miller yesterday signalled an end to the low price the company charges Belarus for gas, saying it would 'be aligned with European prices' from 2007, Kommersant said.

In reality, the size of the gas tariff hike will depend on Belarus' willingness to go ahead with a long-discussed sale of 50 pct of Beltransgaz to Gazprom, the newspaper added.

'Gazprom waited for the end of the presidential election in Belarus ... Now Gazprom has established for Beltransgaz a very tight deadline for an answer -- April 30,' Kommersant reported.

The main obstacle in agreeing the sale of a 50 pct stake in Beltransgaz has been the very different evaluations by the Belarussian and Russian governments of its value, the paper said.

The Beltransgaz network is an important route for Russia's gas exports to the European Union, but it has received less investment than a newer pipeline that also runs through Belarus to Europe, the Yamal-Europe pipeline.

'It has been evident for two years that Gazprom and Belarussian authorities have a very different market evaluation of this stake. Then, Gazprom valued it at about 500 million dollars and Belarus at 2.5 billion dollars,' Kommersant said.

The low price Russia charges Belarus for energy is seen by analysts as one important reason for the public support Lukashenko still enjoys in Belarus.

Source:

http://www.forbes.com/business/feeds/afx/2006/03/31/afx2636385.html

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