BELARUS NEWS AND ANALYSIS

DATE:

03/08/2007

Russia & Belarus avert energy crisis

Russia and Belarus have narrowly averted another energy crisis after reaching a last-minute agreement to cancel threatened cuts in Russian gas shipments that had rattled European nerves.

Gazprom backed down from a threat to slash gas supplies by almost half to Belarus, a key energy transit state to western Europe, after Belarus began repayment of nearly ?333m in overdue debt for past supplies.

Belarusian gas pipeline operator Beltransgaz said it had paid ?138m to Gazprom of the overdue debt.

The Russian gas giant said in a statement it expected full repayment of the debt within one week, and prompt payment of 100% of current gas bills.

A Gazprom official said a cut-off was still possible if the debt was not repaid in full by next week, though the timing and amount would have to be determined then.

The incident was the latest stand-off between Russia and one of its ex-Soviet neighbors to raise fears of supply cuts among western European consumers, who receive 20% of their Russian gas via Belarus.

European consumers briefly saw shipments of Russian oil fall in January, when Moscow cut off shipments through a Belarusian oil pipeline.

A similar dispute over gas prices between Russia and Ukraine, another key transit country, prompted cut-offs last year that hit supplies to western Europe and sparked a wide debate about growing reliance on Russian energy.

The European Commission responded by calling for a meeting next week of the EU's gas coordination group, saying that a safe and undisturbed supply of energy is of key importance for Europe's economy.

Belarus and Russia have repeatedly clashed in recent years as Gazprom has sought control of Belarusian gas infrastructure and Belarus has tried to hold on to steep subsidies for Russian gas.

Source:

http://www.rte.ie/news/2007/0803/russia.html