BELARUS NEWS AND ANALYSIS

DATE:

03/08/2007

Belarus will pay Russian gas bill

ASSOCIATED PRESS

MOSCOW - The Belarusian president said yesterday that his country would pay a $460 million gas bill to Russia in the next few days, possibly with the help of Venezuelan President Hugo Chavez, as a cutoff threatened by Russia's natural gas monopoly approached.

Gazprom said Wednesday that it would nearly halve the volume of gas Belarus receives if it did not pay the debt. That sparked fears Belarus could siphon gas from pipelines taking 20 percent of Russia's gas exports to Europe, and rekindled bitter memories of Gazprom's past disputes with Ukraine and Belarus.

President Alexander Lukashenko's comments in Minsk suggested another protracted dispute was not likely.

"I gave the order for the money to be taken from our reserves and for the payment of $460 million to be made," an angry Mr. Lukashenko told a gathering of Belarusian officials. "Let them live in peace."

Gazprom spokesman Sergei Kuprianov said Mr. Lukashenko's comments "naturally give us hope." A delegation from Belarus pipeline operator Beltransgas will continue negotiations today in Moscow before a 10:00 a.m. deadline, he said. "This is sufficient time to resolve the question."

The gas standoff grows out of a hard-fought deal signed in the last minutes of 2006 that obliged Belarus to pay $100 per 1,000 cubic meters of gas, instead of $46.

The agreement allowed Minsk to pay $55 per 1,000 cubic meters for the first half of the year, but required payment of the balance of $456 million to Gazprom by July 23.

As part of the deal, Belarus agreed to sell half of its national pipeline company to Gazprom for $2.5 billion. Gazprom has so far paid $625 million of that, but the money has been transferred to the Belarusian Finance Ministry, rather than being used to cover the bill.

Some observers have suggested that Gazprom is hoping to acquire further assets against Minsk's gas bills. "They want to privatize the whole country," Mr. Lukashenko said.

Disputes over energy supplies have pushed relations between the traditional allies to a new low, and Mr. Lukashenko said he would be turning to "good friends," including Venezuela's Mr. Chavez, for help paying its energy bills.

On a trip to Belarus in June, Mr. Chavez called for a strategic partnership with the ex-Soviet nation, calling his Belarusian counterpart a "brother-in-arms," and lamenting the pressure he said the United States was putting on both Minsk and Caracas.

The United States and other Western nations have dubbed Belarus "Europe's last dictatorship" because of Mr. Lukashenko's relentless crackdown on dissent and free press.

Gazprom's announcement Wednesday brought to mind a pricing dispute with Ukraine that saw supplies to the European Union drop in the first days of 2006 as Ukraine siphoned gas from a transit pipeline after Gazprom halted direct shipments.

Gazprom supplies a quarter of the gas used by Europe, and the incident drove home Europe's dependence on Russia for energy.

Source:

http://washingtontimes.com/article/20070803/FOREIGN/108030045/1003