BELARUS NEWS AND ANALYSIS

DATE:

28/12/2006

Gazprom Warns European Customers of Possible Disruptions in Deliveries

MosNews

After Belarus has issued an implicit threat that its deepening dispute over natural gas prices with Russia's Gazprom could jeopardize deliveries of Russian gas across its territory, Gazprom has issued its own warning to the European customers.

Gazprom, which is demanding that Belarus pay more than twice the current price for gas next year and hand over a 50 percent stake in its gas distribution system, refused to back down despite the threat from Minsk.

"If a gas supply contract for next year is not reached, Gazprom will have no grounds for deliveries of gas to Belarus as of 10 a.m. Moscow time on Jan. 1, 2007," Gazprom chief Alexei Miller said in televised comments.

Miller said that Gazprom would supply gas for European consumers to the Russia-Belarus border in full compliance with its contracts. But he also said the company sent letters to Germany, Poland and Lithuania informing them about "the developing situation regarding gas supplies to Belarus," suggesting it may fear disruptions in deliveries to those countries. About 30 percent of Russian gas supplies to Europe transit through Belarus, much of it to Germany, Poland and Lithuania.

The remarks came after Belarusian First Deputy Prime Minister Vladimir Semashko shrugged off the threat of a suspension, warning that Gazprom relies on Belarus for transit to Europe and could not risk the international criticism it faced during the Ukraine dispute. "I don't think Gazprom will resolve to cut off gas to Belarus - they shouldn't step on the same rake twice," he said.

"We are interconnected," Semashko said after unsuccessful talks Tuesday with Miller. "I have no contract with Mr. Miller on deliveries to Belarus from Jan. 1, and Mr. Miller has no contract on transit through Belarus."

MosNews has reported earlier that Gazprom said it was prepared for possible disruptions in deliveries via Belarus and has stored reserve amounts of gas in Germany, Austria and the Baltic States. However, the head of Gazprom's export arm Alexander Medvedev was quoted by the Interfax as saying that if Belarus were to siphon off the full amount it normally received for its own consumption, "it would be impossible to fully compensate ... especially over a long period."

Russia supplies Belarus about 20 billion cubic meters of gas annually, and Semashko said that 44 billion cubic meters are expected to transit through Belarus to Europe next year.

Source:

http://www.mosnews.com/money/2006/12/28/gazpromwarns.shtml