BELARUS NEWS AND ANALYSIS

DATE:

26/12/2006

Gazprom to supply gas to Europe even if no contract with Belarus

MOSCOW, December 26 (RIA Novosti) - Gazprom [RTS: GAZP] said Tuesday it will continue to deliver Europe-bound gas to the Russian-Belarusian border from January 1 even if no gas contract is signed with Minsk, the head of Gazprom's export subsidiary said Tuesday.

"All volumes of gas on our export contracts will be delivered to the Belarusian border on January 1 even if we sign no contract with Belarus," said Alexander Medvedev, head of Gazexport.

"I do not want to forecast Belarus's behavior in this case," he said, adding that Gazprom's proposals to Belarus were beneficial for Minsk.

Belarus's contract for Russian gas supplies expires in five days.

Belarus, which is building a Union State with Russia, today pays a discounted rate of $46.68 per 1,000 cubic meters of natural gas, but Gazprom is now seeking a price raise.

"Supplies can never be suspended if a contract has been signed," Medvedev said. "We have neither a short-term nor mid-term contract with Belarus."

Answering the question about what Gazprom's actions will be if Belarus taps gas when no contract is signed, Medvedev said there are international organizations where Gazprom can turn to.

Medvedev also said gas reserves in underground storage facilities could cover its deficit in crisis situations, regardless of what caused them.

"In crisis situations we used them and will use them," he said.

He said Gazprom has gas storage capacities in Europe, including Germany.

Medvedev also said gas transit via Belarus is not linked to gas supplies to that country. "Transit and supplies issues are not and will not be linked," he said.

Medvedev said Belarus, when refusing to accept Gazprom's proposals, is either incapable of assessing their economic element or is deliberately trying to frustrate the talks.

"I would not like to use sharp lexicon, but people who reject such proposals either don't understand and can't assess the economic element or are deliberately trying to foil the talks," Alexander Medvedev said.

Gazprom made its best offer on deliveries of natural gas to Belarus in 2007, Medvedev said, which apparently meant that if Belarus does not accept it, there will be no more talks and gas will not be supplied to Russia's neighbor in 2007.

Gazprom wants Belarus to pay $75 per 1,000 cubic meters plus $30 in Beltransgaz shares, while Belarus is ready to pay $45 per 1,000 cu m plus $30 in shares of the Belarusian government-owned pipeline company, Gazprom spokesman Sergei Kupriyanov said.

"We have exhausted in improving of our proposals to Belarus," Medvedev said. "We have taken into account all Belarusian wishes. The proposals that we have made take into account specifics of the Belarusian economy and our [bilateral] union relations."

Gazprom agreed earlier Tuesday that Beltransgaz, which controls Europe-bound gas pipelines, was valued at $5 billion.

During a price spat with Ukraine, in January, Russia briefly cut off gas supplies to its neighbor, and later Ukraine started siphoning off Europe-bound gas during the halt in supplies. The situation aroused concerns in Europe about Russia's reliability as a gas supplier.

Source:

http://en.rian.ru/world/20061226/57864869.html