BELARUS NEWS AND ANALYSIS

DATE:

03/08/2007

Gazprom confirms Belarus 1st payment, delays supply cut by a week

MOSCOW, August 3 (RIA Novosti) - Gazprom [RTS: GAZP] confirmed Friday that Belarus had made a $190 million installment toward its $460 million gas debt, and delayed cuts in supplies to the country by one week.

Gazprom threatened Wednesday to reduce natural gas supplies to the country by 45% as of August 3 due to the debt and lack of payment guarantees. The Belarusian payment came just hours before the 10:00 a.m. deadline.

"Belarus has today made a considerable payment as part of its debt to Gazprom for gas supplies in the first six months of 2007," the state-controlled energy giant said. "Therefore, the Russian company has delayed cuts in gas supplies to consumers in Belarus."

However, Gazprom kept up the pressure on Belarus, saying it expects Russia's former Soviet ally to pay the debt in full within a week. A spokesperson said supplies would not be reduced in this period.

Belarusian gas pipeline operator Beltransgaz announced Friday the first installment of the debt had been paid to Gazprom in the morning, following a night of intense talks between the companies' representatives in Moscow. Company spokesman Vladimir Chekov said gas supplies had not been interrupted.

"Beltransgaz's network is working in routine mode, fulfilling its obligations to Gazprom in full," Chekov said.

Gazprom's threat had sparked fears that Belarus could tap gas from pipelines transiting Russian gas to Europe in a replay of a bitter price dispute with Ukraine in early 2006, which affected supplies to European consumers. The dispute fueled concerns in Europe of excessive dependence on Gazprom, which supplies 25% of gas consumed on the continent.

Russian Foreign Minister Sergei Lavrov, speaking in the Philippines Friday, reaffirmed Russia's commitment to its gas contracts.

"I would not dramatize the situation [with Belarus]," Lavrov said. "I can confirm that we have never violated a single contract. As far as the European Union is concerned, it knows only too well that we have faithfully carried out supplies."

Chekov said Beltransgaz and Gazprom representatives were continuing to coordinate debt payment technicalities.

Belarusian President Alexander Lukashenko pledged Thursday to take $460 million from national reserves to pay the gas bill to Gazprom.

Belarus's gas debt is the result of a deal reached in late 2006, which forced Minsk to pay $100 per 1,000 cu m of gas, double the 2006 tariff. Under the agreement - which also stipulated that prices for Belarus would gradually rise to European levels by 2011 - Minsk was allowed to pay just 55% of the price in the first half of the year and to settle the balance by July 23.

Belarus said it did not have funds to pay the debt as Russia had been reluctant to give a promised $1.5 billion loan. Gazprom, which recently paid Belarus $625 million for a stake in Beltransgaz - also part of the gas deal - has said Minsk has sufficient resources to pay the debt.

Source:

http://en.rian.ru/russia/20070803/70283027.html