BELARUS NEWS AND ANALYSIS

DATE:

27/12/2006

Germany Shows Understanding for Gazprom

BERLIN - A German official expressed understanding Wednesday for Russian gas firm Gazprom's aim of raising prices to "world market levels," but said that changes should be gradual.

Government spokesman Thomas Steg also stressed Germany's expectation that supplies to Western Europe remain unaffected by a dispute between the Russian gas monopoly and Belarus.

Gazprom has said 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 shut-off.

The company has said a shut-off to Belarus would not affect Russian gas deliveries to Europe that transit the former Soviet republic.

Steg described the latest dispute as "first and foremost a bilateral problem."

"This is about the adjustment of existing prices to the world market level; I think this, in itself, is understandable," Steg told reporters. "However, such adjustment processes must be carried out with transitional periods and in a way that can be planned."

"They cannot be carried out eruptively and then overstrain economies," he added.

"Our interest naturally is that ... the gas supply to Germany and Western Europe is not affected," Steg said. "We have no indication that Russia will not or does not want to comply with its delivery obligations."

Russia supplies about 30 percent of German gas demand, although more travels via Ukraine _ hit by a shut-off in a similar dispute a year ago _ than through Belarus.

Economy Ministry spokeswoman Beatrix Brodkorb noted that Germany has large storage capacities.

"We assume that, as in previous years, even if it got colder, Germany would have good supply security as a result of the various gas network operators' provisions," she said.

Source:

http://www.chron.com/disp/story.mpl/ap/fn/4428195.html