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Daily Telegraph: Gazprom in threat to cut Belarus supplies (*Shell’s Sakhalin Partner)

By Russell Hotten, Industry Editor
Last Updated: 12:17am BST 02/08/2007

Russia threatened to halve gas supplies to Belarus from Friday, prompting concern that the dispute could yet again lead to cuts across the Continent.

The European Union called yesterday for a swift resolution to the row, sparked because Russia’s state-controlled gas company Gazprom says Belarus has unpaid bills of around $456m (£225m).

Western Europe receives almost 20pc of its gas via pipelines running through Belarus. Gazprom said it would continue to pump gas to the West, but could not guarantee that Belarus would not siphon off some for its own use. However, Gazprom has notified customers in western Europe that it may have to use alternative routes.

A dispute over gas prices between Russia and Ukraine, another key transit country, prompted cut-offs that hit supplies to western Europe almost two years ago and contributed to a sharp rise in UK prices. The row sparked a wide debate about the UK’s increasing reliance on Russian energy.

Moscow and Minsk have repeatedly clashed over gas, with Belarus trying to maintain the traditionally large subsidies it received from Gazprom. In January, Gazprom more than doubled gas prices to Belarus.

EU spokesman Martin Selmayr said it took the dispute “very seriously” and asked both sides “to solve the issue amicably without delay”.

Gazprom spokesman Ilya Kochevrin said: “Should Belarus start illegal offtake of gas, we have a concrete plan so customers get their gas. If they do that, we will go to court and increase supplies via alternative [routes].”

With gas demand low in the summer, analysts believe major disruption and price rises can be avoided.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/08/02/cngaz102.xml

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