BELARUS NEWS AND ANALYSIS

DATE:

06/08/2007

Belarus Gains Reprieve in Gas Spat

By Anna Smolchenko
Staff Writer

Belarus was spared a cut in gas supplies on Friday after paying part of its $456 million debt to Gazprom, which said Minsk should pay in full within a week or see its gas deliveries reduced by 30 percent this winter.

Beltransgaz on Friday paid $190 million toward the debt it owed Gazprom for gas supplies, meeting the deadline 15 minutes before time, Gazprom spokesman Sergei Kupriyanov said.

Gazprom had said it would reduce supplies to Belarus by 45 percent at 10 a.m. Moscow time on Friday if the debt were not settled.

The European Union welcomed the deal and canceled an emergency meeting it planned to convene on Wednesday.

"Today they sent us a payment document," Kupriyanov said by telephone, referring to a Belarussian delegation that came to Moscow for last-minute talks Thursday night.

"At least we are seeing some real headway," he said, adding that the next deadline was set for Aug. 10.

He later told Ekho Moskvy radio that Gazprom would cut gas supplies by 30 percent if Beltransgaz failed to pay the outstanding amount by then.

Beltransgaz spokesman Vladimir Chekov confirmed that the payment of the first installment has been made, adding, "We are receiving the full amount of gas."

"Following an assessment this morning, we came to the conclusion that the dispute is on the way to being settled amicably," said Martin Selmayr, a spokesman for the European Commission, which is the European Union's executive.

"We see no urgency at this moment," he said by telephone from Brussels.

Selmayr added that the EU officials would review the gas supply situation at a regular meeting of the Gas Coordination Group in the fall. No date has yet been set for the meeting, he said.

A delegation from Beltransgaz, headed by acting general director Vladimir Mayorov, arrived in Moscow late Thursday for last-minute talks, after the collapse of negotiations on a $1.5 billion loan that Minsk hoped to use to pay off its debt to Gazprom.

Belarussian President Alexander Lukashenko said Thursday that he had issued orders to tap into the country's dwindling reserves, accusing the Kremlin of seeking to appropriate the economy.

After securing a week's grace Friday, a senior Belarussian official attacked Gazprom once again.

According to the agreement between Beltransgaz and Gazprom, 45 days should have been provided to settle any disputes, meaning Gazprom ought to have set the final deadline at Sept. 7, Belarussian Energy Minister Alexander Ozerets said by telephone.

Gazprom's Kupriyanov said the 45-day period was related to court dispute resolutions. In case of payment arrears, Gazprom needed only to notify clients of upcoming supply cuts 48 hours in advance, he said in e-mailed comments.

Deutsche UFG welcomed the reprieve as a positive development.

"However, this is also an indication that only Gazprom's ultimatums can help it to recover debts from some of its customers," it said in a note to clients.

Artyom Konchin, an oil and gas analyst at brokerage Aton, said there were no guarantees that the incident would not be repeated.

"It looks like you have to resort to extreme measures [when dealing] with [Belarus]," he said.

Source:

http://www.themoscowtimes.com/stories/2007/08/06/041.html