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Gazprom threat to cut gas supplies

world Updated: Aug 03, 2007 03:53 IST
Fred Weir

Russia's state-run natural gas monopoly Gazprom has warned it will slash gas supplies to neighbouring Belarus by nearly half on Friday, in punishment for what it claims are unpaid bills.

But mindful of the damage caused to Moscow's reputation as a reliable energy supplier in previous disputes with Belarus, and next-door Ukraine, Russia is carefully assuring its European customers that gas deliveries to them will not suffer due to the clampdown.

"There will be no more discussions," Gazprom spokesman Sergei Kupriyanov told Russian state TV. “The Belarus side is not fulfilling its obligations, so we are going to take measures.”

He added that downstream clients such as Poland, Lithuania and Germany will receive their full allotment of gas "by other means" if necessary. About 20 per cent of Russian gas exports to Europe pass through Belarus.

Previous shutdowns have led to energy shortages and serious political jitters in Europe. Experts say Moscow is moving very carefully this time to ensure there are no wider consequences.

"Every time Russia has a quarrel with any of its neighbours, the Europeans start talking about diversifying their energy sources and complaining that Russia's an unreliable producer," says one political scientist. "The Kremlin needs to think very carefully about how to handle it this time."

Gazprom insists that Belarus is $456 million in arrears on an expected $1 billion payment for its gas consumption for the first half of this year, and will therefore cut supplies to the little Slavic republic of 10 million people in direct proportion, by 45 per cent.

Belarus, Moscow's only remaining ally in the former USSR, was long the beneficiary of heavily subsidised Russian energy.

But following tough negotiations last year, Gazprom forced Belarus to accept a doubling of the price to $100 per thousand cubic metres of gas.

That's still less than half the world market price of around $250, paid by Russia's European clients.