BELARUS NEWS AND ANALYSIS

DATE:

18/05/2007

Belarus, Gazprom deal delayed to June 1

MINSK, Belarus, May 18 (UPI) -- Belarus said Friday a deal with Russia on the sale of half of state-run pipeline operator Beltranshaz was postponed from Friday to June 1.

"Negotiations with Gazprom representatives will continue in Minsk today to agree some aspects of the agreement," Andrey Zhukaw, an assistant to the Belarusian energy minister, told ITAR-TASS news agency.

Gazprom Deputy Chairman Valeriy Golubev is in the Belarusian capital, Minsk, for talks on the issue.

The sticking point is a subclause in the agreement to sell 50 percent of Beltranshaz to Gazprom, the world's No. 1 gas company.

The June 1 deadline was set under a deal signed between the Russian gas monopolist and the Belarusian government Dec. 31, 2006, at the height of their spat over gas pricing.

To buy half of Beltranshaz, Gazprom will pay four installments of $625 million each annually.

Last year Gazprom told Belarus it would raise rates for its gas from $47 per 1,000 cu m to $200. This was surprising because the two countries were close allies.

Gazprom has increased rates for former Soviet republics, which until recently had received gas at well below market rates. Most of the European Union, which relies on Russia for more than 25 percent of its natural-gas needs, pays more than $200 per 1,000 cu m.

Under the new deal, Belarus is likely to pay much less than market rates for Russian gas. In return, Russia has a greater control on gas supplies into Europe.

Source:

http://www.upi.com/Energy/Briefing/2007/05/18/belarus_gazprom_deal_delayed_to_june_1/2744/

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