UPDATE 1-Belarus rekindles Russian gas spat

Fri Jun 25, 2010 5:24pm IST

Related Topics

Stocks

   

* Belarus leader says transit debt not fully solved

* Russia says owes nothing to Minsk

* Tensions flare up after EU said row was over

By Jessica Bachman and Andrei Makhovsky

MOSCOW, June 25 (Reuters) - Tensions over gas between Russia and Belarus flared up again on Friday with Minsk saying it could still halt Russian flows to Europe within 24 hours as it holds out for payment of a small debt which Moscow denies it owes.

The spat burst back into life just a day after Minsk fully resumed gas supplies to neighbouring EU members after a partial suspension on Wednesday in a gas pricing and fee dispute with Russia's gas export monopoly Gazprom (GAZP.MM).

"I am warning the government again -- if Gazprom doesn't pay for services in full in the next 24 hours it could lead to the suspension of all oil and gas transportation services for the Russian Federation," Interfax news agency quoted Belarussian President Alexander Lukashenko as saying.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

For Russia-Belarus map of gas pipelines in Europe here ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

Gazprom said it did not understand what debt Lukashenko was referring to. "Under the existing contract, Gazprom owes nothing to Belarus," Gazprom's spokesman Sergei Kupriyanov said in a statement.

Russia triggered the dispute last week when it said Belarus owed it around $200 million for gas deliveries and started to reduce supplies from Monday. Gazprom resumed supplies to Belarus on Thursday after Minsk paid the bill.

But Belarus also retaliated by threatening to cut off Russian flows to Europe if Gazprom did not pay its debt for gas transit. Minsk said Gazprom owed it $260 million but Gazprom paid only $228 million so far.

Russia, the world's largest energy exporter, supplies Europe with 25 percent of gas needs, with four-fifths of that flowing via Ukraine and one-fifth via Belarus.

Russia also supplies 1 million barrels per day of oil to German and Polish refineries via Belarus and flow remained unaffected so far.

While both countries' rhetoric during the spat has been focused on payment issues, analysts say politics, and not economics, are at the heart of the matter.

Most analysts say halting gas supplies was an attempt by Moscow to force Belarus into joining a customs union with Russia and Kazakhstan, a move which Minsk has postponed in hope of better terms.

Lukashenko also gave refuge to ousted Kyrgyz President Kurmanbek Bakiyev, despite Moscow's support for the new Kyrgyz leadership. [ID:nLDE65M0YA]

(writing by Dmitry Zhdannikov; editing by Keiron Henderson)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Markets

REUTERS SHOWCASE

Canada Shooting

Canada Shooting

Attack on parliament, killing of soldier stun Canada's capital.  Full Article 

Earnings Season

Earnings Season

Wipro sees rosier end to year as U.S. clients spend.  Full Article 

Business Climate

Business Climate

Fears for tough penalties grow as India cleans up business  Full Article 

New Email Service

New Email Service

Google launches new email service dubbed "Inbox".  Full Article 

DLF Appeals

DLF Appeals

DLF seeks interim relief from capital market ban  Full Article 

Falling Oil Prices

Falling Oil Prices

Indian consumers respond to softer oil, food prices  Full Article 

Book Keeping

Book Keeping

RBI fires warning shots on companies' lack of FX hedging.  Full Article 

Policy Repo Rate

Policy Repo Rate

Most external members suggested rate cut in RBI's Sept review.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage