Belarus threatens to take Europe-bound gas after Russian cut

22nd June 2010, Comments 0 comments

Belarus on Tuesday threatened to siphon off natural gas bound for Europe after Russia reduced supplies to its ex-Soviet neighbour by nearly a third in a row over debt payments.

The dispute has prompted Europe to activate crisis planning measures and raised fears of a new "gas war" between Russia and one of its neighbours that would disrupt westward-bound supplies.

In a letter sent to Russian state gas giant Gazprom, the Belarussian government called on Russia to refrain from any further cuts, saying: "Otherwise Gazprom will force the removal of gas from the gas transit system so that the needs of the Belarussian national economy and population can be satisfied."

Gazprom chief executive officer Alexei Miller had earlier announced that Russia was reducing supplies by 30 percent of normal daily volume after Minsk had taken no steps to resolve a debt to Gazprom of nearly 200 million dollars (163 million euros).

"Belarus has not undertaken any action to settle the debt for Russian gas supplies over the past day," Miller said on Russian television.

"From 10:00 am (0600 GMT) on June 22 we are bringing in a reduction of 30 percent on the daily volume of supplies of Russian gas to Belarus."

The company reduced gas supplies on Monday by 15 percent of the daily volume over the debt and Miller said the gas cuts would be incrementally increased to 85 percent in the coming days if a solution to the conflict was not found.

The European Union closely watches gas disputes between Russia and its ex-Soviet neighbours after a row between Moscow and Kiev led to supplies of Russian gas to Europe via Ukraine being cut off for two weeks early last year.

The flow of Russian gas to Europe via Belarus was not interrupted after the reduction Monday.

Analysts have said the dispute is politically motivated and triggered by Belarus's maverick leader Alexander Lukashenko turning away from Moscow and towards the European Union.

Over the past months Russia and Belarus have often been at loggerheads over energy prices and trade issues and Belarus boycotted a key meeting last month when the two ex-Soviet neighbors were set to launch a single customs union together with Kazakhstan from July 1.

Gazprom confirmed Tuesday it had received the letter from Belarus warning it would siphon off Europe-bound gas.

"The letter ends essentially in a threat that in the event of further cuts of gas supply to Belarus they will undertake activities related to the removal of gas from the transit system," company spokesman Sergei Kupriyanov said in comments posted on the website of Vesti-24 television channel.

Gazprom warned that new cuts would be forthcoming if Belarus did not settle the debt but said European consumers had nothing to worry about.

"We have prepared an action plan if the Belarussian side moves to violate its transit obligations and encroaches upon the gas meant for European consumers," Gazprom Deputy Chief Executive Officer Alexander Medvedev told a news conference.

Analysts said the row would deal a new blow to Gazprom's already battered reputation but would likely not present a major threat to European energy supplies.

"A prolonged conflict is unlikely, given the relatively small amount allegedly overdue and Belarus's need to re-fill storage during the low consumption season," VTB capital said in a note to clients.

© 2010 AFP

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