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24 Jun, 2010 05:15

Supply of Russian gas to Belarus restored, threat to cut transit remains

Russia has restored gas supplies to Belarus after the country paid its debts. However, the conflict is still not over with Minsk still threatening to cut transit of supplies to Europe over Gazprom’s debt.

The Russian energy giant is saying the payment for transit has already been transferred to Belarus.

“Gazprom has paid Belarus $1.45 for one thousand cubic meters per 100 kilometers, in exact accordance with the contract,” said Gazprom spokesperson Sergey Kupriyanov. “The whole sum amounts to $228 million. It is payment for November, December and the first months of 2010,” he elaborated.

Belarus, however, claims it has not received the money yet and has given Gazprom several hours to officially notify Minsk of the payment. Otherwise Minsk is threatening to cut off the transit of gas through its territory to Europe.

The inability of the two sides to come to an agreement regarding the exact sum owed by Gazprom to Belarus further complicates the issue.

The transit payment conflict is based on different economic approaches to the issue, said Sergey Kupriyanov. Belarus wants to increase the transit rate, but does not fulfill the conditions to do so, he explained on Thursday.

“…Gazprom was ready to pay by the old rate, but [our] Belarusian colleagues refused to accept such payment,” Kupriyanov said.

Belarusian demands are irrelevant to the existing agreement, the head of Gazprom Aleksey Miller claimed on Thursday.

Therefore, “the issue [of restoring gas supplies to Belarus] is not fully resolved,” Miller said.

Belarus insists the Russian company should pay $260 million.

If the money is not transferred in full, the country will limit the transit in proportion to the missing sum, claimed First Vice Prime Minister of Belarus Vladimir Semashko.

While the problem is being debated, on Wednesday and Thursday Belarus was taking gas for itself from transit flows, said Miller.

“The fact that Belarus ‘sneaked into the export pipe’ led to the decreasing of the supplies by 20% of the planned amount,” Miller explained. “Today the situation repeated itself.”

Russian Prime Minister Vladimir Putin said he is sorry that the gas row went so far and expressed hope that nothing like that will take place in the future.

“We warned our Belarusian partners on many occasions that they should pay for gas deliveries in time. Gazprom forwarded written notifications to them three times, but never got a coherent answer,” Putin noted at a meeting dedicated to energy issues.

He also stressed that payment for gas transit through Belarus should be carried out in accordance with the contract.

“Agreement obligations concerning both gas prices and transit obligations have to be fulfilled by both parties,” he said, emphasizing that all changes have to be accepted only after bilateral talks.

“We need to have a discussion with the Belarusian party, our Belarusian partners, in a normal, friendly business atmosphere to clear up all the issues, which are debatable, if there is any debate,” Putin added.

Earlier on Thursday Gazprom has confirmed that Belarus has paid out its own debt to Russia. Despite the fact that the sum was lower than the one Gazprom was requesting, the company has decided to restore supplies to the neighboring country which had earlier been cut by 60%.

“[Gazprom head Aleksey] Miller in a phone conversation has confirmed that the Belarusian party has fully paid for gas supplies and Gazprom has decided to restore gas delivery to the country in full,” reported Russia’s presidential press secretary.

The pipeline that goes through Belarus supplies about 6% of European gas – and the cutoff has been causing great concern. The European Energy Commissioner has even called the Moscow-Minsk situation a gauntlet to the entire European community, and that all gas agreements have to be carried out in full.

Belarus has been calling on Russia for a review of the gas costs since the beginning of this year, claiming that it is not satisfied with the prices. No new agreement has been made so far between the two countries.