BELARUS NEWS AND ANALYSIS

DATE:

28/12/2006

Belarus threatens Europe on gas prices

Moscow/Minsk (dpa) - Senior Belarusian officials on Wednesday threatened to increase the price of natural gas supplied to Europe, and even halt the shipments outright, as a row with the Russian energy giant Gazprom deepened.

"If the contract for the delivery of gas to Belarus (from Gazprom)is not signed, that means that there is no contract for gas shipped in transit (to Europe)," said Eduard Tovpenets, Belarusian Vice Minister for Energy, in remarks reported by Interfax.

"How can we ship the gas (to Europe) without a contract?" Tovpenets asked.

Some 20 per cent of Gazprom's gas enters Europe via piplelines crossing Belarus. The present contract between Belarus and Gazprom for natural gas deliveries, both to Belarus and shipped onward, will become ineffective on January 1 2007.

Tovpenets' warning was the Belarusian government's first open threat in a long-running stand-off with Gazprom that Minsk would shut down its share of Gazprom's deliveries to Europe, rather than accept tough terms being offered by the Russian firm.

"Negotiations are continuing," Tovpenets said.

Belarusian Deputy Premier Vladimir Semashko took a somewhat more moderate stance, saying Minsk and Gazprom were in a situation of "mutual dependence," according to a news agency Itar-Tass report.

Speaking Wednesday in Minsk, Semashko said he was confident that Gazprom would not shut off the gas taps to Belarus.

Minsk and the Russian gas monopoly have been at loggerheads for weeks after the latter announced its intention to increase more than four-fold the cost of gas for Belarus, from 46 dollars per 1,000 cubic metres to 200 dollars.

The Russian giant however later said it would revise downwards its price demand for 2007 to 110 dollars per 1,000 cubic metres, conditional on it gaining control of the strategically important trans-Belarus pipeline network.

Semashko stopped short of Tovpenets' outright threat of a halt to Gazprom shipments via Belarusian pipelines to Europe - a move with the potential of frightening nervous European energy markets.

But, like Tovpenets, Semashko stressed that just as Minsk's contract with Gazprom for gas delivery was due to expire at the end of the year, so too were agreements between the two on transit tariffs.

The deputy prime minister also blamed Gazprom for the failure of talks on the matter which had ended without success in Moscow the previous day, and said resolution of the row was now down to the Russian energy giant.

A similar dispute over gas and gas transit pricing between Gazprom and the Ukrainian government one year ago led to a two-day reduction in gas supplies to Europe, and spot shortages across the continent.

Source:

http://www.bangkokpost.com/breaking_news/breakingnews.php?id=115522