Monday, June 21, 2010


Belarus vows to pay its gas debt in 2 weeks

21 June, 2010, 10:51

President Medvedev has ordered Russia's state-owned gas producer to cut supplies to Belarus after Minsk failed to pay its debt. Belarus reacted by promising to pay up in two weeks.

The May payment deadline is June 23.

On Monday, the two sides met in Moscow in an attempt to reach an agreement. Belarus recognized its $200 million debt, but refused to repay the sum in cash, instead offering payment in machinery, equipment and other commodities.



The Russian president said such an offer was unacceptable and that a conventional payment must be made.

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The cut limit will start with 15 per cent reduction and is going to reach 85 per cent of the supply volume.

Gazprom CEO Aleksey Miller said that the remaining 15 per cent will enable Belarus to keep its gas pipeline network in a working condition until the debt is paid off.

Moscow says the restrictions will not affect its European consumers, as Gazprom has a reserve plan under which greater volumes of fuel may be pumped through Ukrainian territory.

Russian Prime Minister Vladimir Putin expressed hope that supplies to European countries will not have to be re-routed.

“Technically, Belarus would be able to siphon off the gas transited through its territory. In this case we are able to re-route these streams to other hubs, including Ukraine. But I hope we won’t have to resort to that,” Putin said.

Gazprom spokesman Sergey Kupriyanov noted that the debt may increase rapidly, as Ukraine pays just $150 per 1,000 cubic meters, while the contract price is $184. With the monthly export totaling around 1.4 billion cubic meters, the debt may reach $260-270 million by the end of June.

Belarus has also mentioned that Gazprom in turn owes it a comparable sum.

“Yes, there is a debt. Belarus is not signing a document about completed work and this prevents us from paying off this debt,” Kupriyanov admitted, adding that the debt itself is about $192 million.

Dmitry Aleksandrov from the Univer Investment Group says this dispute is unlikely to harm ties between Russia and the European Union.

''This dispute over the payment for gas will not affect relations between Moscow and Brussels. There is a stand-off towards Minsk from the European Union. Aleksandr Lukashenko failed to bring Belarus closer to the EU and this, to some extent, gives Moscow carte blanche to act strongly. Possibly, it's the reason the situation has become so tense,'' Dmitry Aleksandrov says.






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