RUSSIAN STATE-OWNED gas company Gazprom announced it was cutting gas supplies to Belarus yesterday following instructions from President Dmitry Medvedev.
Belarus has continued to pay $150 per 1,000 cubic metres for gas deliveries, as per a previous agreement which is no longer valid. A new agreement stipulates rates of $169 per 1,000 cubic metres for the first quarter and $185 for the second quarter of 2010.
Authorities and representatives of Beltransgaz, a company half- owned by the Belarusian government and half by Gazprom, have intermittently promised to pay at the new rates.
They have also claimed that membership of a new customs union which came into force this year between Russia, Kazakhstan and Belarus should entitle Belarus to pay Russian domestic prices for gas.
In a further twist, the Belarusian energy ministry claimed late last week that Gazprom owed Beltransgaz significant debts in unpaid duties on gas piped through Belarus.
Russian news agency RIA Novosti quoted chairman of the management committee of Gazprom Alexei Miller as saying that cuts would start at 15 per cent of daily supplies, and thereafter, if necessary, would be increased gradually up to 85 per cent.
The Kremlin website yesterday published details of a conversation between Mr Medvedev and Mr Miller in which the president instructed the Gazprom executive to reduce supplies but continue negotiating with Belarusian representatives.
Mr Miller reported that the Belarusians had proposed to pay off the gas debt with deliveries of machinery. The president insisted that the debt be paid according to the original terms, stressing that Gazprom could not accept remuneration “in pies, butter, cheese, pancakes, or any other form of payment [not stipulated in the contract]”.
Novosti initially reported that Belarusian representatives denied the cuts in supply had come into effect. But by yesterday afternoon, it was carrying news that the Belarusian energy ministry was issuing guarantees that Gazprom’s penalties would not impact on gas supplies to Europe. Europe’s Energy Portal estimates Russian imports amounted to 40 per cent of total gas imports to the EU in 2008.
The cuts are the latest in a long list of tough measures taken by Gazprom to force its Eastern European neighbours to pay outstanding debts. A similar dispute which erupted between Gazprom and Belarus in 2006 led to Gazprom’s acquisition of 50 per cent of the shares in Beltransgaz.
The company also had a troubled relationship with the previous Ukrainian administration, leading to crippling supply cuts throughout former president Victor Yushchenko’s tenure.
Gazprom has been quick, however, to capitalise on the improved relationship between Russia and Ukraine to mitigate any attempts Belarus may make to disrupt supplies to Europe. Russian prime minister Vladimir Putin said yesterday that volumes of gas transported via Ukraine to Europe could be increased.