BELARUS NEWS AND ANALYSIS

DATE:

28/12/2006

Gas talks turn bitter for Russia, Belarus

By David Holley
Tribune Newspapers: Los Angeles Times

MOSCOW -- Russia and Belarus traded bitter words Wednesday in a dispute over natural-gas prices that threatened to damage relations between the longtime allies and disrupt supplies to other European countries.

The Russian state-controlled gas monopoly, Gazprom, reiterated a threat to cut off natural gas for Belarus on Monday if no agreement on price is reached by then. It accused Belarus of planning to steal gas intended for European Union states by tapping into pipelines carrying Russian gas west.

That accusation came a day after the collapse of negotiations in Moscow aimed at reaching new contracts for 2007 for the sale of natural gas to Belarus and for the transit of gas across it. Belarus' chief negotiator had triggered the accusation by telling reporters that his country had leverage in the talks because of the transit pipelines, implying that Belarus might siphon gas or shut down the flow to other countries.

Gazprom is seeking to more than double the price of gas it sells to Belarus, although the new price would remain far below that which European Union countries pay. Belarus, meanwhile, is demanding that Gazprom pay sharply increased transit fees, which would partly offset the gas price boost.

Gazprom insists that in the absence of a new contract, Belarus can receive no gas as of Monday morning. But Belarus has said that if no agreement is reached by Monday, it would continue to receive gas at the current price until a new contract is signed. Gazprom spokesman Sergei Kupriyanov, in comments reported by the Russian news agency RIA Novosti, said Belarus' assertion shows that it "plans to tap Europe-bound gas in the absence of a contract."

Speaking on Russian state-run television, Kupriyanov accused Belarus of greed. "After all, Gazprom is not Santa Claus," he declared.

Belarusian First Deputy Prime Minister Vladimir Semashko, who handled the recent negotiations in Moscow, said Tuesday that there was no need to fear the threatened cutoff of supplies because Gazprom needs to send gas through pipelines across Belarus.

"Belarus will have gas on Jan. 1, 2007, because we are interdependent," Semashko said in comments reported by the Russian news agency Interfax.

Gazprom has proposed that Belarus pay $105 for each 1,000 cubic meters of gas--$75 in cash plus $30 in shares of the Belarusian state-owned pipeline company, Beltransgaz. Over time, such a deal could give Gazprom control of the pipelines.

Belarus has said it would be willing to pay only $75 in cash, RIA Novosti reported.

Source:

http://www.chicagotribune.com/news/nationworld/chi-0612280198dec28,1,5460125.story?coll=chi-newsnationworld-hed

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