BELARUS NEWS AND ANALYSIS

DATE:

13/11/2006

Smiles Mask Tough Talks Over Gas With Belarus

Combined Reports

President Vladimir Putin met his Belarussian counterpart, Alexander Lukashenko, on Friday for what seemed likely to be tough talks on Russian oil deliveries and control of gas pipelines.

The two leaders, meeting in the glare of media cameras in an ornate room in the Kremlin, seemed anxious to mask any discord, greeting each other with a hearty handshake and warm words.

"Our relations are developing quite successfully," Putin said, adding he would like to discuss prospects for economic and political integration.

But in a statement before the meeting, the Kremlin said it was "concerned" by the fact that oil deliveries to Belarus substantially exceeded its internal oil needs. The Kremlin said it would like to discuss ways of "correcting" a situation where Belarus uses Russian oil, imported on favorable terms, for profitable oil products' exports to third countries.

This "practice ... leads to gigantic losses for the Russian budget," the statement said.

In a brief statement after the meeting, the Kremlin said that bilateral economic relations should be built "on mutually beneficial terms based on market principles."

A Kremlin official in sharper comments earlier Friday said that Russia would regard "any attempt to politicize [the gas talks] as a form of pressure." The official was speaking on condition of anonymity because he was not authorized to speak to the media.

Russia satisfies most of Belarus' energy needs. Last year it transported 19 million tons of oil and 20 billion cubic meters of natural gas, with deliveries on the rise this year.

The talks on gas also seemed likely to be tough. Last week Russia's ambassador in Minsk said Gazprom might raise gas prices for Belarus fourfold unless Moscow obtained some control of pipelines that carry gas to its European customers. Lukashenko has threatened to sever all relations with Russia if it proceeds with the price increases.

Belarus pays about $47 per 1,000 cubic meters of Russian natural gas at the moment, while Gazprom wants to raise prices to about $200, suggesting concessions on pipeline ownership would result in a price cut.

(Reuters, AP)

Source:

http://www.moscowtimes.ru/stories/2006/11/13/046.html