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Gazprom commits to stable EU gas transit via Belarus despite price spat

Increase font size  Decrease font size Date:2016-08-22   Views:438
Russia's Gazprom remains committed to ensuring the stable transit of gas via Belarus to Europe, as well as supplying its contracted gas volumes to Belarus itself, despite an ongoing gas price spat between Moscow and Minsk.

Gazprom CEO Alexei Miller met with Belarus' deputy Prime Minister Vladimir Semashko on Thursday to discuss gas cooperation, Gazprom said in a statement.

The meeting comes amid a dispute over gas prices that has seen Russia reduce the volume of crude oil it sends to Belarus.

It has also raised fears that Russia could be using energy as a weapon to force Belarus' hand -- it already cut off Belarus' gas supply before in 2004 and 2010.

Russia's current price for Belarus stands at $132/1,000 cu m, but Belarus believes that $73/1,000 cu m would be a fair price under current market conditions.

Russia disagrees, pointing to formulas written into an intergovernmental agreement, and has also said that Belarus still owes at least $200 million in unpaid bills for gas supplies so far in 2016.

Russia's energy ministry continues to engage in talks with the Belarus government over the issue, but there has been no sign of resolution so far.

Neither the ministry nor Gazprom had any comment on the price dispute Friday.

But Belarus President Alexander Lukashenko said Friday that the country was looking to reduce imports of Russian gas and use more locally sourced fuels.

"We buy more than 20 Bcm of gas and the country spends about $3 billion on it every year," Lukashenko said, according to a statement on the presidential website.

"I am convinced that we can and must do our best to reduce these expenses," he said, adding that Minsk has already replaced more than 2 Bcm/year of gas imports with local fuels.

Belarus is also looking to build its first nuclear power station to reduce its gas dependence in the power sector, though the project has proven to be controversial not least following a construction accident in July.

STABLE TRANSIT

In the meantime, Gazprom is looking to reassure its European customers that there is no cause for concern.

"The company ensures stable transit of Russian gas via the territory of Belarus," it said, adding that in the first seven months of this year some 24.2 Bcm of gas was transited via Belarus to Europe and the Russian enclave of Kaliningrad.

Gazprom also said it continued work on preparing Belarus' gas transportation system for the upcoming fall-winter season.

"Gas is being pumped into Belarus' underground storages according to the schedule," it said.

Gazprom has three underground storage facilities: one at Mozyr and one at Osipovichi in southeastern Belarus close to the Russian border, and one at Pribugskoye near the Polish border.

Gazprom also said it would continue a "reliable gas supply" to Belarus itself and would meet the country's demand.

In the first seven months of 2016, Russia supplied 10.3 Bcm of gas to Belarus, Gazprom said.

Russian Prime Minister Dmitry Medvedev last month warned Belarus that the standoff between the two countries over gas prices and debts could lead to a "deadlock" that would be difficult to resolve.

He even cited the "experience of previous years" in his warning, saying he did not want the situation to deteriorate past the point of no return.

On July 1, Russia said it would reduce the volume of crude oil it was sending to Belarus by 40% to 2.25 million mt for the third quarter compared with Q2.

Moscow said the decision was taken because of the ongoing row over gas prices and debts.
 
 
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