BELARUS NEWS AND ANALYSIS

DATE:

31/12/2006

No progress in gas talks with Belarus - Gazprom

MOSCOW, December 31 (RIA Novosti) - Gazprom [RTS:GAZP] has not yet reached an agreement with Belarus on supplies and transit of Russian naturals gas in 2007 as the deadline to cut gas deliveries to the ex-Soviet republic is approaching, a company's spokesperson said Sunday.

"Unfortunately, the negotiations are still underway, but failed to bring results so far," Sergei Kupriyanov said in a live broadcast on Russia's Vesti television.

The state-controlled Russian natural gas monopoly earlier warned Belarus it will cut off supplies to the country at 10 a.m. Moscow time [7 a.m. GMT] on January 1 if a new agreement is not signed by that time.

"If before we talked about setting up a joint venture on the basis of Beltransgaz [a Belarusian gas monopoly], now we are discussing the purchase of a 50% stake [in the Belarusian company]," the Gazprom official said, adding that the Russian energy giant offered the highest price for the stake - $2.5 billion.

"There is no point for us to maintain low prices [for natural gas] under these conditions," Kupriyanov said.

He reiterated that Belarus was offered the most favorable gas delivery terms, compared with other ex-Soviet republics.

Gazprom has proposed that Belarus pay $75 per 1,000 cubic meters in cash, plus $30 in shares of Beltransgaz, while it currently charges Armenia $110 per 1,000 cu m, Ukraine - $130 for Central Asian gas and Moldova - $160. In addition, Gazprom has recently signed contracts for the supply of 1.1 billion cu m of gas to Georgia in 2007 at $235 per 1,000 cu m.

The spokesman said that without new contracts Gazprom will not be able to continue pumping gas to Belarus for its domestic consumption because it would violate Russian laws.

"We will be forced to cut off supplies of natural gas to Belarus for domestic consumption in the morning on January 1," Kupriyanov said.

However, the Gazprom official promised that gas deliveries to Russia's partners in Europe via Belarusian territory will continue in full accordance with all previously signed contracts.

Source:

http://en.rian.ru/russia/20061231/58231800.html