- The Washington Times - Thursday, August 2, 2007

MOSCOW — Russia’s state-controlled monopoly Gazprom, the world’s biggest gas producer, sent an unseasonable chill through European capitals yesterday, announcing that it will nearly halve supplies to Belarus over an unpaid $456 million bill.

The announcement triggered bitter memories of a pricing dispute with Ukraine when supplies to the European Union fell in the first days of 2006 as Ukraine siphoned gas from a transit pipeline. Gazprom supplies a quarter of the gas Europe uses, and the incident drove home Europe’s dependence on Russia for energy.

More than 20 percent of Russia’s gas supplies to Europe go through Belarus, reaching buyers in Germany, Poland, Lithuania and Ukraine as well as the Russia’s Baltic enclave of Kaliningrad.

As the clock ticked toward a 10 a.m. deadline tomorrow for Belarus to pay its bill, Gazprom sought to assure customers in Europe that there would be no interruptions. If Belarus skimmed the gas it needed from the export pipes that transit its territory, Gazprom had “several, very concrete plans” for what could be done, Ilya Kochevrin, the head of communications with the monopoly’s export arm, told a conference call yesterday evening. He did not provide details, but suggested that Gazprom could increase flows through Ukraine.

Mr. Kochevrin added that there was less likelihood of Belarus pumping gas from the pipe to cover its shortfall because it is summer and demand is lower. He also insisted that Belarus, which for many years has received gas at about a fifth the rate that Europe pays, had the means to pay.

Not everyone was so confident.

“We take these developments very seriously,” EU spokesman Martin Selmayr said. “We call on both sides to resolve the dispute without delay and to create conditions for the timely resumption of deliveries.”

The news prompted concern in Poland, which imports nearly 60 percent of its gas from Russia.

“We can’t accept suggestions that our supplies could suffer due to a dispute between Gazprom and Belarus,” Polish Economy Minister Piotr Wozniak said.

Early this year, Russia temporarily halted crude supplies to Minsk in a dispute over oil duties, which led to brief shortfalls in Poland and other European nations.

The current gas standoff traces its roots to a hard-fought deal signed in the last minutes of 2006 that obliged Belarus to pay $100 per 1,000 cubic meters of gas instead of $46.

To give its economy time to adjust, the deal allowed Minsk to pay $55 per 1,000 cubic meters for the first half of the year, but stipulated that it must transfer the balance of $456 million to Gazprom by July 23.

That deadline came and went, but no money was paid. Talks in the past week between Belarusian officials and Gazprom have brought no results. Belarusian Prime Minister Sergei Sidorsky was in Moscow on Monday to discuss a Russian loan to help Minsk pay its gas bill, but no agreement was reached.

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