Belarus, Russia sign long-awaited gas transit deal

2nd July 2010, Comments 0 comments

Belarus and Russia have signed a gas transit deal expected to end disagreements that led to a cut in Russia's Europe-bound supplies flowing via Belarus last month, officials said on Friday.

The Russian gas giant Gazprom said it had agreed to pay Belarus's gas pipeline operator Beltransgaz a gas transit fee that Minsk had long insisted upon.

"Gazprom and Beltransgaz have signed a supplement to the contract for supply and transit of gas for 2007-2011," the Russian gas giant said in a statement.

"A fee for the transit of Russian gas along the Beltransgaz network will in 2010 amount to 1.88 dollars per 100 kilometers." Gazprom had earlier paid a transit fee of 1.45 dollars.

A spokesman for Beltransgaz in Minsk, Vladimir Chekov, and Belarussian government spokesman, Alexander Timoshenko, confirmed to AFP the agreement had been signed but declined to provide further details.

The signing of the agreement comes after Belarussian President Alexander Lukashenko threatened last Friday to halt all of Russian energy supplies -- both oil and gas -- if Gazprom did not settle a debt for gas transit.

Gazprom last week paid 228 million dollars in gas transit fees but Belarus said it had to pay another 32 million dollars.

In a separate statement on Friday, Gazprom said it would settle the outstanding difference "in the nearest future." It did not provide further details.

Belarus's first deputy prime minister Vladimir Semashko said earlier this week that Russia had admitted to owing it 32 million dollars for transit.

Analysts say the signing of the agreement will put to rest current disagreement over gas prices but a new energy conflict may flare later this year as Russian gas prices for Belarus are set to keep growing.

Minsk now has to pay 185 dollars per 1,000 cubic metres and that figure is expected to grow to at least 193 dollars in the third quarter.

Belarus says it sees no reason to accept a price hike since the two neighbors are working to ramp up economic cooperation.

Lukashenko is also bitter that Russia earlier this year offered Ukraine a discount of around 30 percent on Russian gas imports, with those subsidies effectively worth 40 billion dollars over the next 10 years.

The most latest dispute between Moscow and Minsk flared on June 21 when Russia reduced gas supplies to cash-strapped Belarus over a debt of nearly 200 million dollars.

After an initial cut of 15 percent, Gazprom ramped up reductions to 60 percent on June 23.

Following the cut, Lukashenko said he had ordered a shutdown of Russian gas transit deliveries to Europe in retaliation, raising fears in the European Union, where member states Lithuania, Germany and Poland take Russian gas delivered through Belarus.

Gazprom then said it had restarted gas supplies after Belarus paid off its debt.

But Lukashenko then threatened last Friday to halt all of Russian supplies -- both oil and gas -- if Russia did not pay a debt for transit.

Gazprom chief executive Alexei Miller said later that day a new gas transit deal would be signed soon without being more specific.

In recent months Russia and once-dependable ally Belarus have often been at loggerheads over energy prices and trade issues.

The two countries together with ex-Soviet Kazakhstan had been in talks to launch a joint customs bloc from July 1 but Minsk had bailed out at the last minute following disagreements with Russia over oil duties.

Russia's first deputy prime minister Igor Shuvalov said this week it would become clear Monday whether Belarus chooses to join the bloc.

© 2010 AFP

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