Belarus ready to settle its debt

Belarusian President Aleksandr Lukashenko says Minsk will settle its half-billion dollar debt with the Russian gas giant Gazprom in the next few days. Meanwhile, the European Commission has called on both Russia and Belarus to ensure that supplies to Euro

“I made an order to take this money from the reserves to pay those $US 456 MLN. This is not a large amount for the country. Of course we are draining the reserves but today Chavez and other good friends of ours tell us not to worry about this. They are willing to give us loans whatever we need without interest,” Belarusian President Aleksandr Lukashenko said.

Sergey Kupriyanov, Gazprom’s official spokesmen came up with an official statement, saying the company was satisfied with Belarus’ willingness to pay its debt. He also said the representatives of the Belarusian state-owned gas operator Beltransgaz had already departed from Minsk to Moscow.

They are due to hold talks in the headquarters of Gazprom on Friday. According to Mr Kupriyanov, if the talks are successful, there will be no cuts in gas supplies to Belarus.

It's believed Belarus owes Gazprom around $US 450 MLN. On Wednesday the gas monopoly announced its plans to cut part of Belarus' gas , unless it receives the money.

At the beginning of 2007, Gazprom raised prices for Belarus from $US 46 to $US 100 per 1,000 QM.  In order to adapt to the new requirements, Belarus requested an extension to the end of the year without any penalty.

Gazprom responded by giving a credit of nearly $US 500 MLN. Belarus accepted it, but hasn't been able to pay the debt back on time.

“In accordance with the contract Belarus made 55% of payments in cash and had to pay the accumulated debt before July 23. It's August 1 but Gazprom has not got anything of the $US456 MLN debt accumulated during the first half of 2007, or a guarantee of its payment. We’ll cut gas supplies to Belarus in accordance with the contract starting August 3. The volume of gas going through the country will remain the same. Under the contract, Belarus must provide transit for the full volume of the pipeline,” Sergey Kupriyanov, Gazprom's spokesman, said. 

Europe has repeatedly raised concerns about its overdependence on Russian gas supplies. But this time European companies say there is no reason to worry.

“We shall not exaggerate the risk of this specific event. It is summer, the winter was warm, and we don't expect the peak of gas consumption. And reserves are at the maximum at the moment,” believes Stephane Meunier, Director-Partner of SIA Conseil.

And  Gazprom assures transit supplies to Europe via Belarus will not be affected as  the latest dispute is not the same as the one last winter.

“There were no agreements on the conditions of the gas supply then. We had controversy over the transit conditions. Now there is a contract, which the Belarusian side hasn't kept,” explained Sergey Kupriyanov. 

Also, speaking to RT, political analyst Kirill Koktysh explained why gas supplies to Europe are not under threat:

“The situation with gas supplies to Belarus is quite different from the situation with gas supplies to Ukraine and is also different from oil transportation through Belarus's territory. While almost all oil pipelines going through Belarus's territory are irreplaceable, gas pipelines are essential only for gas supplies to Russia's Kaliningrad region,” the expert said and then continued: “In fact, there are very few gas volumes going through Belarus to Europe and they can be easily replaced by the Ukrainian gas pipelines. Indeed, gas supplies to Europe cannot be affected even in case of gas blockade of Belarus.”