Gazprom/Belarus strike deal to avoid cut-off
Gazprom and the Belarussian government signed an accord on gas prices for 2007 to avert a supply disruption that likely would have spilled over into Europe. Under the deal, Gazprom will charge Belarus just US$100 per 1000 cubic metres (cm) for gas supplies in 2007, well below the Russian gas giant’s earlier price demands of US$200 per 1,000cm, although Belarus will see prices for Russian gas imports rise to ‘market’ rates within the next five years. The agreement on gas prices, along with a separate deal allowing Gazprom to buy a 50percent stake in the state-run Belarussian gas transportation system, Beltransgaz, for US$2.5bn, prevented the disruption of Russian gas supplies via Belarus to Europe, and moved Gazprom closer to its goal of securing ownership of the Belarussian gas pipeline network. Together with higher oil import tariffs imposed on Belarus by Russia, the higher prices will put a strain on the Belarussian economy, and cause further isolation of this 10-million-strong country to the east of the European Union’s border. |
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