Russia: New gas conflict with Belarus?

May 21, 2010 at 2:41 PM   |   Comments

MOSCOW, May 21 (UPI) -- Russian energy giant Gazprom Friday accused Belarus of refusing to pay agreed prices for Russian gas.

Gazprom spokesman Sergei Kupriyanov Friday said Belarus state gas transit company Beltransgaz has paid according to a unilaterally determined price, which is much lower than the price agreed in the contract.

That's why "the debt for gas delivered to Belarus is increasing month-by-month," Russian news agency Interfax quoted Kupriyanov as saying.

In the January-March period, Beltransgaz accumulated debt worth $137 million, Kupriyanov said, adding that after another payment deadline had passed Friday, its current debt increased by $55 million to $192 million.

He said the country's debt could increase to $600 million by the end of the year, adding that Gazprom is highly concerned by the payment irregularities.

The remarks came as Russian Prime Minister Vladimir Putin was to meet his Belarusian and Kazakh counterparts for customs talks in St. Petersburg Friday.

Earlier this year, a conflict between Russia and Belarus over 2010 oil prices damaged relations between the traditional allies.

Russia temporarily stopped the oil flow to Belarus, saying the country wanted to profit from below-market prices by reselling Russian gas tax-free. Most of the oil flowing to Belarus is refined and resold to the West, with the majority reaching Poland and Germany. In a tit-for-tat move, Belarus state power firm Belenergo has threatened to cut electricity to the Russian enclave of Kaliningrad.

After some diplomatic wrangling, Belarus and Russia struck a deal. Putin said in March that the Kremlin will subsidize Belarusian oil and gas deliveries by some $4.2 billion in 2010. Gazprom, the state-controlled energy giant, this year acquired 12.5 percent of Beltransgaz for $625 million.

Belarus has in the past years profited from energy prices below free-market levels. Interfax reported that Belarus has to pay an average of $171.50 per 1,000 cubic meters of gas in 2010. Europe pays around $400 for the same amount.

Russia has also given the country multibillion-dollar loans to help it survive the economic crisis.

Nevertheless, a 2007 row with Russia temporarily halted oil deliveries to Belarus, affecting supplies for Europe.

And Russia has clashed with transit countries several times during the past years.

Europe in early 2009 battled its worst energy crisis in more than three decades when a dispute between Russia and Ukraine halted gas supplies to Europe during a bitter cold spell, leaving several countries in Central and Eastern Europe without adequate heating supplies.

Ukraine is an important gas hub for Europe -- around one-fifth of the continent's gas supplies arrive via Ukrainian pipelines.

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