BELARUS NEWS AND ANALYSIS

DATE:

01/08/2007

Russia to cut gas supplies to Belarus

(MOSCOW) - Russia threatened to cut gas supplies to Belarus by nearly one-half from Friday unless bills for this year were paid, prompting urging from the European Union for a swift resolution.

Pricing disputes between Moscow and Minsk have previously hit energy supplies to western Europe, which receives about 20 percent of its Russian gas via Belarus.

"The daily delivery of gas to Belarus under contract will be reduced by 45 percent to what has actually been paid for from 10:00 am (0600 GMT) on August 3," Russia's state-controlled gas giant Gazprom said in a statement on Wednesday.

Seeking to assure European customers, Gazprom said it had informed its partners in Europe about the planned cut-offs and added that Belarus "is obliged to guarantee the unobstructed transit of Russian gas to third countries."

The European Commission reacted swiftly, with spokesman Martin Selmayr saying it took the dispute "very seriously" and calling on both sides "to solve the issue amicably without delay."

A dispute over prices led to disruptions in oil supplies to several European countries earlier this year.

Belarussian Energy Ministry official Andrei Zhukov told AFP that Minsk was preparing proposals to Gazprom "to resolve the problems that have arisen in the shortest possible time."

The two sides have repeatedly clashed in recent years as Gazprom has sought control of Belarussian gas infrastructure and Minsk has tried to hold on to steep subsidies for Russian gas, on which its economy is heavily dependent.

Gazprom more than doubled gas prices to Belarus to 100 dollars (73 euros) per 1,000 cubic meters on January 1, and in May, won a deal to acquire 50 percent of Belarus' national pipeline operator for 2.5 billion dollars.

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

Source:

http://www.eubusiness.com/news_live/1185973202.35