BELARUS NEWS AND ANALYSIS

DATE:

27/12/2006

Belarus warns Russia over gas transit to Europe

MINSK, Dec 27 (Reuters) - Belarus showed no sign of bowing to Russian pressure on proposed steep gas price rises, suggesting it would not allow Gazprom to send supplies through its pipelines unless a 2007 deal was clinched by the New Year.

"We are inter-dependent. If I don't have a domestic gas supply contract, Gazprom won't have a transit deal," Belarus's Deputy Prime Minister Vladimir Semashko said at Minsk airport late on Tuesday after his return from failed talks in Moscow.

"I think Gazprom should give a signal and come to Minsk. It's their turn now."

Semashko did not say whether Belarus was prepared to stop all gas transit via its territory.

Gazprom said on Tuesday the latest round of talks with Belarus on 2007 prices had ended without agreement. But it added that consumers in western Europe were safe as it had stockpiled enough gas in Germany and Austria to guard against possible cuts.

Relations between Russia and its former ally Belarus have turned sour ahead of the New Year deadline, reviving memories of last year's cutoff of supplies to Ukraine which reduced flows to Europe in the first days of January.

Gazprom still hopes for a deal to allow Belarus to receive gas in 2007 and Gazprom to transit gas smoothly via Belarus to Poland and Germany.

Gazprom has repeatedly warned Belarus it has to pay higher prices from 2007 and share control of its pipelines with the Russian firm or face reduced supplies from the New Year.

Gazprom, the world's largest gas producer, supplies a quarter of Europe's gas needs. The cutoff to Ukraine prompted European leaders to raise concerns over reliance on Russia.

Source:

http://today.reuters.com/news/articlebusiness.aspx?type=tnBusinessNews&storyID=nL27924973&imageid=&cap=&from=business