BELARUS NEWS AND ANALYSIS

DATE:

02/08/2007

Minsk, Moscow reach gas accord

MINSK, Belarus, Aug. 2 Belarus will reach into its national reserves to pay its debt to Russia for natural gas after Gazprom threatened to nearly halve its exports.

It comes as Minsk looks for loans as a way to meet the newly raised prices for Russian gas without accepting Gazprom offers for ownership of Belarusian pipelines.

"I have instructed the government to take $460 million from our reserve and pay for Russian gas supplies. This is not a major sum for the country," said President Alexander Lukashenko, RIA Novosti reports. "Our reserve fund will be emptied, but other countries are ready to help us, including (Venezuelan President Hugo) Chavez and foreign commercial banks."

Meanwhile, a team from Beltransgaz, the state-owned pipeline company, is heading to Moscow to meet with officials from Gazprom, the Russian gas monopoly.

Russia increased the price of gas to Belarus to $100 per 1,000 cubic meters in January, doubling its previous fee though it is less than half what most of Europe pays for Russian gas. Russia allowed Belarus to pay just $55 per 1,000 cubic meters during the first half of 2007, with the remainder due by July 23. After Minsk missed the deadline and was unable to secure a deal with Russia, Moscow said it would cut supplies by 45 percent, sparking concern from Europe.

Europe receives 20 percent of its Russian gas through Belarus, with the rest via Ukraine, which faced a similar price hike a year and a half ago.

The European Commission said Thursday it would call a meeting of its gas coordination group to study the gas-supply spat between Belarus and Russia.

"The Commission believes that a safe and undisturbed supply of energy is of key importance for Europe's economy," the EC said in a statement on its Web site. "Energy supply disputes in the EU's direct neighborhood are therefore of serious concern to the European Commission."

Belarus had been seeking a loan of $1.5 billion from Russia to meet its current and future bills. It was approved by the Russian Finance Ministry but then rejected by Prime Minister Mikhail Fradkov.

Instead, Lukashenko said, he'll look to other countries for what he called "not an interstate loan, but a commercial loan."

Source:

http://www.earthtimes.org/articles/show/89692.html