RUSSIA: Gazprom Gets Belarus Debt Payment, Extends Deadline

OAO Gazprom, Russia's natural-gas exporter, said it received a ``significant part'' of a $460 million debt owed by Belarus, averting a supply cut to the country.

Gazprom will put off a 45 percent decrease in deliveries scheduled for today, giving Belarus one week to pay the rest, the state-run company said in an e-mailed statement. Belarus President Alexander Lukashenko said yesterday his country would repay the debt with help from Venezuelan President Hugo Chavez and ``Western banks.''

Belarus transferred $190 million this morning, the Interfax news service said, citing the deputy head of Belarus pipeline operator OAO Beltransgaz. Gazprom may still reduce deliveries next week by 30 percent, in proportion to the payment it receives, company spokesman Sergei Kupriyanov told Ekho Moskvy radio station today.

Gazprom has threatened to cut gas shipments to Belarus twice in the past year. Belarus's debt ballooned after Gazprom doubled the price of deliveries in an agreement reached just minutes before midnight on Dec. 31. Belarus, which ships a fifth of Russia's gas exports to Europe, barely missed a halt in supplies on New Year's Day and a repeat of Gazprom's shutoff to Ukraine a year earlier.

The European Union, which experienced a drop in gas volumes during the 2006 Ukrainian dispute, today called off an emergency meeting to discuss the row between Gazprom and Belarus.

`No Need'
``The commission no longer sees a need to call an urgent meeting of the gas coordination group next week,'' European Commission spokesman Martin Selmayr told a Brussels press conference. ``We are convinced after our contact with the two parties that for the moment the dispute is settled.''

Under the deal reached on New Year's Eve, Gazprom agreed to raise Belarus's gas price incrementally to reach western European levels by 2011, while Belarus said it would cede 50 percent of Beltransgaz to Gazprom over the same period.

In the first half of the year, Belarus paid only for 55 percent of its gas supplies from Russia, according to Gazprom's statement. At the same time, Gazprom said it paid Belarus about $30 million a month for gas transit to Europe and $625 million for the first 12.5 percent stake in Beltransgaz.

Today's reprieve was reached after a Beltransgaz delegation entered negotiations with Gazprom last night. Gazprom had threatened to cut supplies at 10 a.m. this morning after a week of talks yielded no results.

Via: Bloomberg
by Lucian Kim