MOSCOW, Dec 31 (Reuters) Belarus's top gas negotiator flew into Moscow on Sunday, raising hopes of a last-minute deal in a pricing dispute that threatens to disrupt Russian gas supplies to Europe from New Year's Day.
Russia's gas monopoly Gazprom has said it will cut gas supplies to Belarus from 0700 GMT on Jan. 1 if no deal is reached, while Minsk said it would retaliate by halting flows of Russian gas crossing the country bound for Western Europe.
About 20 percent of Russian gas exports to Europe go through Belarus. A similar dispute between Gazprom and Ukraine a year ago briefly disrupted supplies to Europe and raised questions about Moscow's reliability as an energy supplier.
Gazprom spokesman Sergei Kupriyanov told Reuters Belarus's First Deputy Prime Minister Vladimir Semashko, who has led talks with the Russian company, had arrived in Moscow.
Until now the two sides had been communicating by fax, and it was understood Semashko would only travel to Moscow in person if there was a real chance of signing a deal.
Asked by Reuters if Semashko might sign a deal in the Russian capital on Sunday, Belarus Energy Minister Alexander Ozerets said: ''It's not only my hope. It think it's a real (prospect.)'' Ozerets said though that if there was no deal by Jan. 1 and Gazprom cut supplies for Belarus's domestic use, Minsk would disable the Yamal-Europe pipeline, which carries all Russian gas transiting Belarus en route to Western Europe.
''In the event that gas supplies to Belarus are cut off we will in turn cut off the power supply to gas compressor stations on the Yamal-Europe pipeline,'' Ozerets said. Shutting down electricity to the pump stations would halt the flow of gas.
Russia supplies about a quarter of Europe's gas needs. Eighty percent of the exports pass through Ukraine and the rest through Belarus.
Germany -- one of the biggest customers for Russian gas -- and the European Union have pressed Moscow and Minsk to reach a deal quickly and avoid any disruption to supplies.
Gazprom is seeking to bring the heavily discounted prices paid by former Soviet neighbours closer to world market levels. It is demanding Belarus pay at least 0 per 1,000 cubic metres of gas from 2007, up from the it pays at the moment.
Gazprom is also seeking ownership of gas distribution infrastructure inside Belarus as part of a deal.
REUTERS DKS BD1710