No more free lunches

Gazprom has paid for gas transit via Belarus, but insists that the contractual provisions should be followed.

Belarus demands to pay for Russian gas transit according to the terms of the contract, Gazprom head stated.

“We have received a letter from the first Vice Prime Minister of Belarus, in which he sets forth demands to pay for Russian gas transit via the territory of Belarus on the conditions which do not comply with the contract. In case of contradicting the demands the Belarusian side threatens to shut down the transit through its territory, Alexei Miller said at consultations with Russian Prime Minister Vladimir Putin, Interfax reports.

Thus, Miller noted that with resuming supplies of gas for Belarus by Gazprom “the issue is not completely settled”.

Gazprom chief executive stated that on Wednesday and Thursday Belarus siphoned off gas from transit deliveries.

“Cutting volumes of deliveries because of Belarus’ taking from transit pipeline reached 20% of the planned deliveries volumes, and the same situation is observed by us today,” Miller said.

Russian Prime Minister Vladimir Putin stated the necessity to settle controversial issues of payments for gas transit through Belarus in the course of negotiations.

“Gas transit payments must be carried out in line with the contract, at the same time it is necessary to carry out negotiation with Belarusian partners, and at the table of negotiations, in a normal friendly atmosphere, in businesslike environment clear up all the issues which are still disputable questions, if there is some dispute there at all,” Putin said.

Speaking about the situation with gas deliveries, Putin said with pity that the conflict has started with the country with which Russia has “special relations”.

He attracted attention to the fact that Belarus received Russian natural gas at the lowest price.

“I would like to point out that the Belarusian partners are receiving Russian natural gas at the lowest possible price,” Putin said.

He noted that even after reducing prices for gas for Ukraine, Belarus still receives cheaper gas than the Ukrainian partners.

“It should be taken into account that Russia does not take export duties for gas delivered to Belarus, and the Russian budget receives less than it is due, 1 billion 200 million rubles annually,” Putin said.

He noted that the Russian side had many times warned the Belarusian partners about the necessity to pay for gas supplies on time – Gazprom sent written notifications three times and received no answers.

“Me and Dmitry Medvedev had to remind our Belarusian partners several times at the highest level about the necessity to fulfill one’s obligations, and there was no reaction,” Putin said.

Transit has been repaid “in strict compliance with the contract”

Belarus wants to increase the transit rate, but does not fulfill the conditions for its increase, said Gazprom spokesperson Sergei Kupriyanov.

He explained that according to the contract, the basic rate for transit $1.45 per thousand cubic metres for 100 km is stipulated in the contract. When creating a joint venture based upon Beltransgaz, a possibility to increase the rate to $1.74 in 2009 and $1.88 in 2010 was provided for.

However this issue was linked with increase of wholesale markup for gas sold by Beltransgaz at the domestic market, $10.47 per thousand kilometers in 2009, and $11.08 in 2010. However this markup has not been introduced.

“Considering that these issues are connected, Gazprom was ready to pay the previous rate, but the Belarusian colleagues refused to take this payment,” S. Kupriyanov said.

He noted that Gazprom had paid Beltransgaz for transit in November- December and for the first months of 2010 “in strict compliance with the contract, with a basic rate of $1.45, $228 in total”.

Gazprom demanded the Belarusian side to pay for gas $192 mln more, however Beltransgaz repaid $187 mln. S. Kupriyanov explained that the size of the payment for gas depends also on the transit rate. In this case the Belarusian side set the transit rate at $1.88.