Russia’s state-controlled gas monopoly has called off planned gas cuts to its former Soviet neighbor Belarus after Minsk paid a substantial part of a $456 million gas debt before a Friday morning deadline, the national gas monopoly said. However, Russian energy giant, Gazprom has reportedly extended its deadline by one week for Belarus to pay in full. Comforting European Union, Gazprom’s official spokesmen have stated that there will be no cuts of the Russian gas supplies to Belarus. Earlier, Gazprom had warned it would cut gas supplies to neighboring Belarus by almost half on Friday, in punishment for what it claims are unpaid bills. The EU had been watching nervously the gas dispute between Russia and Belarus and was in a process to call a meeting of stakeholders next week to review the natural gas supply situation due to the eventual impact on the flow of gas to the European recipient countries.
The recent gas dispute once again fueled concerns that consumers in West European countries might also be affected and further raising questions about Russia’s reliability as an energy supplier. According to the Russian energy giant the main bone of contention was Belarus’ failure to pay $460 million for gas delivered in the first half of this year. Belarus is the crucial transit route for Russian gas exports in Europe and a potential cut of gas supplies by Gazprom could affect customers in Poland, Lithuania and Germany. According to the reports, Belarus pipeline operator Beltransgaz has paid $190 million, or more than 40 percent of the bill.
Earlier, following the gas dispute between Russia and Ukraine, supplies to the EU had considerably plummeted in the initial days of 2006 as Ukraine was accused of siphoning gas from a transit pipeline after Gazprom halted direct shipments. And that raised question over the reliability of Russia as a trusted gas supplier to Europe. At present, the Russian energy giant supplies a quarter of the gas used by Europe.
However, the recent face-off stemmed out of an agreement struck in the last minutes of 2006 that required Belarus to pay $100 per 1,000 cubic meters of gas, instead of $46. The agreement had permitted Minsk to pay $55 per 1,000 cubic meters for the first half of the year, but required payment of the balance of $456 million to Gazprom by July 23. In the meanwhile, the EU had issued a statement after the dispute surfaced urging Gazprom and Belarus to ‘react in proportionate manner to disagreements and in any event not to disturb, either directly nor indirectly, the gas supply to EU member states.’
Belarussian President Alexander Lukashenko, until recently a close Kremlin ally, has been discontented over the fact that Russia had been raising prices for oil and gas supplies to Belarus at the start of the year. In response he had raised a transit duty on Russian oil going to Europe across his country by more than 30 percent.
