BELARUS NEWS AND ANALYSIS

DATE:

27/12/2006

No gas supplies to Belarus without contract - Gazprom

MOSCOW, December 27 (RIA Novosti) - Gazprom [RTS: GAZP] will not supply natural gas to Belarus without a contract, an official spokesman for the Russian energy giant said Wednesday.

Gas talks between Belarus and Gazprom - the ex-Soviet state's sole gas supplier - finished Tuesday with no agreement for next year. The situation is reminiscent of a bitter pricing row with Ukraine at the start of this year when Russia briefly cut off supplies, affecting consumers in Europe.

"Gazprom is not Santa Claus to make such gifts to Belarusian authorities," Sergei Kupriyanov said in response to Belarus's refusal to accept the price proposed by the company.

Gazprom proposed Belarus pay $75 per 1,000 cubic meters in cash plus $30 in shares of the Belarusian government-owned pipeline company, Beltransgaz. Belarus said it was only ready to pay $75 in cash.

Belarus's deputy prime minister called Tuesday Gazprom's action a provocation and said the country would proceed from the current contract, expiring in four days, if a new contract was not signed by January 1, 2007.

Kupriyanov said the statement was tantamount to the declaration of plans to siphon off gas from Europe-bound pipelines.

"Statements that Belarus will stick to the 2006 price of $46.68 per 1,000 cu m until the [new] contract is signed can be described as plans to tap Europe-bound gas in the absence of a contract," he said.

Belarus, which is building a Union State with Russia, currently pays a discounted rate of $46.68 per 1,000 cu m and charges Russia a transit rate of $0.75.

Russian popular daily Kommersant said Wednesday, citing a Kremlin source, that Russia, which has moved to raise gas prices for its former Soviet allies closer to European levels, had proposed to Belarusian President Alexander Lukashenko to choose between the market price and Moscow's conditions of finalizing the Union State.

Source:

http://en.rian.ru/russia/20061227/57935741.html