Gazprom threatens Belarus to take to court and to cut gas deliveries (Updated)

The Russian company insists that Belarusian authorities must pay $244 million debt.

Gazprom demands to repay the debt in July, said Gazprom CEO Alexei Miller at a press-conference on Friday.

“The debt of Belarus is $244 million. They are to pay in July this year, otherwise we will act in compliance with the terms of the contract. We can go to law, and we also can resort to cutting the volume of deliveries,” Miller said.

“We hope that the debt which has accumulated since the beginning of the year would be repaid,” he added.

Belarus must pay for Russian gas under the current contract, that is, in accordance with the price formula, and not the average annual gas cost, Miller said.

He noted that the possibility to pay for gas under the average annual price was discussed at the level of the leadership of the countries indeed. However, this provision hasn’t been reflected in the supplementary agreement to the earlier signed contract. Thus, Belarus must pay for gas according to the formula considering the coefficients for the year 2009.

We remind that Gazprom company demanded Beltransgaz to pay off its $230 mln debt. Gazprom insists than Belarus should also pay the debt for gas supplies in January-April and fines and penalties for not utilizing the contracted volume of gas. Belarus responded in turn it doesn’t have any debts to Russia.

It should be reminded that on June 15, Russian Kommersant daily wrote that the cooldown in Russian-Belarusian relations and the demarche of Alyaksandr Lukashenka, who refused to visit the CSTPO summit in Moscow can lead to a “new attack on Minsk that will be a gas attack this time”.

The issue of the gas price for Belarus was discussed by Dmitry Medvedev and Alyaksandr Lukashenka back in December 2008. Then they agreed that the price would be calculated according to the following formula: the average European price with a decreasing coefficient 0.8 minus transportation costs and export duty. However, in the first quarter of 2009 Minsk “failed to notice” gas price increase from $128 to $210 per thousand cubic metres, and paid according to the previous tariff, which caused a debt to “Gazprom” of about 70 mln over the winter. In the end of March during the talks of the two presidents in Zavidovo a decision seemed to be found. Moscow allowed Minsk to pay for Russian gas at an average annual price of about $150 per thousand cubic metres, and the term of the final settlement of account was postponed till the end of the year. However, the agreement remained verbal. Russia can use this fact as a tool for additional pressure on Minsk, demanding to follow the terms of the contract of 2006 and pay for gas deliveries every quarter.