BELARUS NEWS AND ANALYSIS

DATE:

03/08/2007

Gas conflict between Russia, Belarus will linger - view

MOSCOW, August 3 (Itar-Tass) - The gas conflict between Russia and Belarus will continue, as it is obvious from the situation, President of the Union of Independent Gas Producers Viktor Baranov said.

"Russia should be less yielding and take a firmer stance in resolving the issues in which it's 100 percent right," he told Echo Moskvy radio.

For his part, President of the Union of Oil and Gas Producers Gennady Shmal noted "that the Belarussians' position has no economic or legal grounds."

"You have to pay for the goods. If you take something, you'll have to pay for it sooner or later. There's no politics in the gas dispute, a debt is a debt," Shmal said.

Belarus has been buying gas under absolutely easy terms, with Gazprom continuing to pay much money for gas transit. Belarus will "certainly pay for the gas, it's a matter of time," he added.

On Friday, Belarus paid the first 190-million-dollar tranche of the 460-million-dollar debt for Russian natural gas supplies.

In this connection, Gazprom decided to postpone cuts in gas supplies to the republic.

"Today, Beltransgaz has made the first payment for a considerable part of the debt to Gazprom for gas supplies in the first half of 2007," Gazprom said in a statement on Friday.

"We see real steps of the Belarussian side," Gazprom spokesman Sergei Kupriyanov emphasized.

On August 1, under the Belarussian-Russian gas supply and transit contract in 2007-2011. Gazprom sent to Beltransgaz an official notification about possible cuts of gas supplies to Belarussian consumers over the non-fulfillment of payment liabilities for gas supplies in the first half of 2007 and the lack of payment guarantees. Since 10.00 Moscow time on Friday, the Russian side intended to cut by 45 percent the daily gas supplies to Belarus in proportion to actual payment.

On December 31, 2006, Gazprom and Beltransgaz signed the gas supply and transit contract in 2007-2011. The document sets forth a Russian gas price at 100 dollars per 1,000 cubic meters of gas in 2007. Meanwhile, under the contract the Belarussian side paid for 55 percent of gas supplies in the first half of 2007, but under the condition of repaying the remaining sum before July 23 and the transfer to the full payments for gas supplies as of July 1, 2007. Belarus' gas debt amounted to 456.16 million dollars in January-June 2007. The current contract was violated, the payments for gas supplies were not effected on time and no guarantees for payments were given.

On Thursday evening, a group of Beltransgaz officials led by acting Director General Vladimir Mayorov urgently went to the Russian capital. On the same day President Alexander Lukashenko said he issued orders to take 460 million dollars from the reserves and transfer them to Gazprom in order to repay the debt for gas supplies from the beginning of the year. "This is not a sum for the country. Let them take this money and live, how they plan to live," the Belarussian leader underlined.

The European Commission meanwhile called off a meeting of the coordinating group for gas over the Russian-Belarussian crisis.

The coordinating group meeting participants were to have analyzed the state of gas supplies to the EU, in the context of the current Russian-Belarussian conflict. The European coordinating group comprises representatives of governments and energy companies of 27 EU member states, as well as European officials. Its extraordinary sessions are held when a threat to the EU energy security emerges, in particular, over risks of reduction of energy supplies to Europe.

Earlier, the European Commission urged Russia and Belarus to find a solution to the current problem as soon as possible without resorting to tough measures and with full observance of contract obligations so that natural gas supplies to Europe are not affected directly or indirectly.

Source:

http://www.itar-tass.com/eng/level2.html?NewsID=11767763&PageNum=0