Wednesday, June 23, 2010

Belarus 'clears gas debt with Russia'

Belarus says it has fully paid off its debts to Gazprom for Russian gas.

The announcement came shortly after Russia made a further cut in the gas supply to Belarus in a row over payments, reducing it by 60% in all.

Lithuania says its gas supplies, which are pumped via Belarus, had fallen 30%.

Belarus had borrowed $200m (£135m) and transferred $187m to Gazprom "to clear the debt", Belarus First Deputy PM Vladimir Semashko said. There was no confirmation from Gazprom.

Earlier on Wednesday Gazprom announced that it was cutting supplies to Belarus further. The 30% cut followed cuts of 15% on Monday, and a further 15% on Tuesday.

Gazprom has threatened to continue tightening the taps until supply is down to only 15% of its previous level.
Allies at odds

Russia increased the price of gas supplied to Belarus from $150 per 1,000 cubic metres of gas last year, to $169.20 in the first quarter of 2010 and $184.80 in the second.

But Belarus continued to pay at $150. Gazprom said at that rate it could owe $500m or $600m by the end of the year.

Belarusian President Alexander Lukashenko had warned of a "gas war", and claimed that Belarus was owed $260m (£176m) by Russia in fees for using transit pipelines.

Belarus has previously insisted Russia provide it with cheap oil and gas as part of a customs union deal that is due to come into force next month.

Russia and Belarus are supposed to be close allies but have had several rows in recent years, particularly over energy supplies.

Russia has cut gas supplies to both Ukraine and Belarus several times in recent years.

Lithuania said earlier on Wednesday that supplies had fallen 30%, after Belarus had warned that countries further down the pipeline would be affected.

Lithuania, the first EU country to be affected, said it was preparing to import gas via neighbouring Latvia.

Lithuania's energy minister, Arvydas Sekmokas, said he did not expect to face "major problems", as energy demand during summer was less.

Most Russian gas bound for European countries goes via Ukraine, but Lithuania, Germany and Poland rely on supplies through Belarus.

Poland and Germany have not reported a drop in supplies.

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