BELARUS NEWS AND ANALYSIS

DATE:

24/07/2007

Belarus asks Russia to delay gas debt payment

MINSK, July 24 (Reuters) - Belarus has asked Russian gas export monopoly Gazprom to allow Minsk to delay the repayment of $500 million debt for Russian gas deliveries after missing the deadline on Monday, an official said on Tuesday.

A delegation from Belarus headed by Energy Minister Alexander Ozerets has asked for a delay at talks with Gazprom in Moscow, Andrei Zhukov, the spokesman for Ozerets, told Reuters.

"We are asking for a delay... We will obviously have to pay a fine, which is also currently being discussed," he said.

Gazprom said talks had been continuing since Monday but declined further comments.

The talks are due to end on Tuesday, but a source close to the meetings said Belarus' Prime Minister Sergei Sidorsky might fly to Moscow in a bid to reach a compromise.

Gas pricing rows between Gazprom and Belarus have threatened to cut flows of Russian gas to Europe several times over the past years and as a result relations between the company and Belarus are closely watched by market analysts and politicians.

Belarus is a transit route for around 20 percent of Russian gas exports, mainly to Poland and Germany. The remaining 80 percent is sent to Europe via Ukraine. Russia covers around a quarter of Europe's gas needs.

The latest pricing dispute was in December 2006 when Gazprom threatened to raise gas prices for Belarus at a time of worsening political relations with Minsk.

In January, Belarus agreed to sell half its pipeline firm Beltransgas to Gazprom for $2.5 billion, while Gazprom said it would raise gas prices for Belarus to just $100 per 1,000 cubic metres, instead of the initially planned $200, from $46.

The deal also allowed Belarus to pay for only a half of its gas supplies from Russia for six months to avoid a shock to its the economy, which means Belarus has been paying old prices for Russian gas in the first half of this year.

Full payments were due to start in July.

Belarus has announced plans to borrow one billion euros ($1.38 billion) on Western markets and has also asked Russia to lend it $1.5 billion.

Belarus will receive 21.5 billion cubic metres of gas from Russia this year, including 10 bcm in the first half.

Source:

http://asia.news.yahoo.com/070724/3/3594o.html

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