BELARUS NEWS AND ANALYSIS

DATE:

27/12/2006

Belarus Fears Rise That Russia Will Cut Off Gas Supplies

MosNews

Residents of Belarus capital Minsk stocked up on warm clothes and electric heaters as fears rose Tuesday that Russia is about to cut off the natural gas on which the country depends, The Associated Press reports.

Russia says Belarus must pay more than twice as much for gas next year -- and even more later -- and turn over a half-share in its pipeline system, a major transit route to Europe, if it wants to avoid a New Year's gas shutoff.

Talks yesterday between Belarus and Russia failed to resolve the issue and a senior official of Russia's natural gas monopoly OAO Gazprom said a cutoff was certain without an agreement. "In the absence of a contract, there is not and cannot be a basis for the delivery of gas to any country or any consumer in the world," Gazprom's export division chief Alexander Medvedev said.

Belarus President Alexander Lukashenko said the talks on Russian supplies were "very difficult" and urged energy saving. "In the conditions of pressure on Belarus one must know how to live within one's means and economize, especially on energy," he said. Mr. Medvedev said a shutoff would not affect the 30 per cent of Russian gas deliveries to Europe that transit Belarus. Russian gas provides a quarter of Europe's consumption.

Mr. Medvedev said Gazprom had scrapped its initial demand that Belarus begin paying $200 (U.S.) per 1,000 cubic metres of gas in 2007. Under what he called a final offer, Belarus would pay $105 next year -- well below world market prices, but more than twice the $47 it now pays.

The price would consist of $75 in cash and $30 in shares of Beltransgaz, he said.

Source:

http://www.mosnews.com/news/2006/12/27/belarusgasfears.shtml