Gazprom makes Belarusian regime pay according to contract

Belarus must pay for gas according to the contracted price, providing price adjustment every three months.

Interfax learnt this from Andrei Kuznetsov, aide on economic issues of the Russian embassy in Belarus.

“Paying $150 in January–September means withdrawing of the contract. Who will resolve to do this?” A. Kuznetsov wonders.

“Gas prices for Belarus in the first and second quarters of the year will meet the terms of the contract,” he added.

The representative of the embassy also stressed that “in February–March, Gazprom paid in advance about $250 million for a year’s gas transit via Belarus to compensate for additional expenses of the Belarusian party in the first quarter.”

According to him, “The average price for Belarus for the first half of the year will be calculated taking into account this sum, which is in fact a technical loan. The mechanisms are different, but a result is the same – the average year’s price.

Kuznetsov also said Gazprom didn’t fine Beltransgaz for incomplete gas sampling in 2008, though the sanctions may have been significant – some tens of millions dollars.

“I have clarified this issue,” he stressed. He supposed the Belarusian authorities were given incorrect information about the matter.

It should be reminded that Alyaksandr Lukashenka said during his working visit to the Homel region on April 7:

“We are not tapping gas, but they impose sanctions on us. We have agreed on a price of $150 for gas, but then others arrive and say we must pay more.”

In early 2009, Belarus applied Gazprom and the Russian government asking to allow Beltransgaz to pay the calculated year’s average price, 150 per 1,000 cu m of Russian gas, in January–September 2009 with additional calculations in the last quarter of the year.

The Belarusian side explains its request with sharp increase in gas import prices in the first quarter – 1.6-fold in comparison with the fourth quarter up to $210 per 1,000 cu m, that can be explained with high cost of oil and oil products in the first half if year 2008 (taking into account the time lag, using in the contract to peg gas prices to oil basket). Taking into consideration decline in oil prices since the second half of year 2008, gas prices for Belarus in the second quarter 2009 will decrease down to $160 per 1,000 cu m. It is forecasted that gas prices for Belarus will have declined to $90 per 1,000 cu m by the end of the year.

Belarus paid for gas at $150 per 1,000 cu m for January–February. Andrei Kruglov, deputy chairman of Gazprom said in late March “Belarus paid for gas deliveries in accordance with the contract. Actually, there had been no doubts.”

In 2008, Beltransgaz got 21.1 billion cubic metres of gas for inner needs of Belarus that is up 2.4% over 2007 and by 2.4 % less volume planned.

In 2008 the volume of gas transit via Belarus increased by 3.8% to 51.3 billion cubic metres (6.2% above the projections). Some 18.5 billion cubic metres were pumped through the Beltransgaz gas transport system (up 1.1% over 2007, and 19.2% above the projection); 32.8 billion cubic metres were moved through the Yamal-Europe gas pipeline as it was projected (up 5.5% from 2007).