Russia cuts gas flow for Belarus

Since 9 a.m. June 21 Russia imposed a regime of limiting gas supplies to Belarus by 15% with cutting by 85% later.

A statement of Gazprom CEO Alexei Miller was televised in morning newscast on NTV channel.

“The term of 5 days given to the Belarusian side for resolving issues of indebtedness for Russian gas supplied has expired,” Miller said.

“Indebtedness has not been repaid, and since 10 a.m. Moscow time, June 21, 2010 the regime of limiting Russian gas supplies to Belarus by 15% of the planned daily volume of gas deliveries is launched, with a gradual transition to cutting the supplies by 85% proportionally to indebtedness,” Gazprom chief said.

We remind that Russian President Dmitry Medvedev ordered to Gazprom to start cutting gas deliveries to Belarus, continuing consultations with Minsk on repaying the indebtedness.

During the working meeting with Gazprom chief Alexei Miller, the leader of the state offered him to report “how the work on talks with Belarus on gas supplies debts is preceding and what are the results of these talks,” RIA Novosti informs.

“Belarus recognizes the gas debt, but offers to pay for it in cars, equipment and other goods,” Miller said. Thus, he stated, the talks ended in nothing.

Since the beginning of 2010 Belarus pays for gas to Russia not according to the contract, but according to the price established in a unilateral procedure, as a result, Belarus owes about $200 mln already.

Medvedev underlined that according to the Russian laws, foreign payments could be taken in foreign currency only, otherwise it would contradict the law. “Gazprom cannot accept as payment anything: either pies, or butter, cheese, or other means of payment,” he said.

As it was informed earlier, on Monday 9 a.m. Minsk time Gazprom could cut gas supplies to Belarus by 85% because of the $200 mln debt for the “blue fuel” delivered earlier. On Sunday Minsk threatened Moscow by problems with transit, and then sent a delegation to Russia which tried to settle the dispute.

The contract price for gas deliveries to Belarus is $169 per thousand cubic metres, however Belarus pays $150, which has caused the indebtedness, $192 mln by May 1. According to Gazprom, Beltransgaz debt can reach $500-600 mln by the end of the year because of payments according to the price lower than the contract one.