Russia, Belarus sign gas deal; Europe supplies safe

 
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MOSCOW, Jan 1 (Reuters) Russia and Belarus on Monday announced a last-minute deal on gas prices, moments before Moscow was to start cutting off supplies with potential knock-on disruption for customers in Europe.

At a joint news conference, Alexei Miller, CEO of Russian gas monopoly Gazprom , and Belarus Prime Minister Sergei Sidorsky, said Russian gas exports to Europe via Belarus were out of danger after a deal was agreed.

''A mid-term agreement was reached on gas prices to Belarus and on transit shipments to Europe,'' Miller said.

Under the accord, Belarus agreed to pay Gazprom 0 per 1,000 cubic metres of natural gas, up from the ex-Soviet Belarus has been paying until now.

Gazprom will pay MOSCOW, Jan 1 (Reuters) Russia and Belarus on Monday announced a last-minute deal on gas prices, moments before Moscow was to start cutting off supplies with potential knock-on disruption for customers in Europe.

At a joint news conference, Alexei Miller, CEO of Russian gas monopoly Gazprom , and Belarus Prime Minister Sergei Sidorsky, said Russian gas exports to Europe via Belarus were out of danger after a deal was agreed.

''A mid-term agreement was reached on gas prices to Belarus and on transit shipments to Europe,'' Miller said.

Under the accord, Belarus agreed to pay Gazprom $100 per 1,000 cubic metres of natural gas, up from the $46 ex-Soviet Belarus has been paying until now.

Gazprom will pay $2.5 billion to control half of Belarus's pipelines for four years and also agreed to pay almost double the transit tariff to shift gas to Europe.

Gazprom had said it would cut supplies to Belarus from Jan.

1 if a deal on new gas prices to its neighbour was not reached by midnight on Sunday. Minsk said it would retaliate by halting Russian gas crossing the country on its way to Western Europe.

The gas row revived memories of a similar dispute with ex-Soviet Ukraine exactly one year ago which briefly disrupted Russian deliveries to Europe and shook confidence in Russia's reliability as an energy supplier.

Russia supplies about a quarter of Europe's gas needs and Gazprom ships about 20 percent of the gas it exports to Europe via Belarus, with the rest going via Ukraine to the south.

The contract under which Gazprom has been supplying gas to Belarus expires at midnight on Sunday. By comparison, Gazprom charges European customers over $250.

Gazprom says the price increase for Belarus is part of the firm's campaign to bring the amounts Russia's ex-Soviet neighbours pay for their gas into line with world prices.

In the past 12 months, Russia has agreed hefty price rises with ex-Soviet Ukraine, Georgia, Armenia and Moldova.

Western critics have accused the Kremlin of using the gas price increases as a political weapon to punish some of its neighbours for moving closer to the West.

Belarus though does not appear to fit into that category.

Its President Alexander Lukashenko has quarrelled with the West, which accuses him of abusing human rights, and seeks closer ties with Moscow.

Reuters DH VP0432 .5 billion to control half of Belarus's pipelines for four years and also agreed to pay almost double the transit tariff to shift gas to Europe.

Gazprom had said it would cut supplies to Belarus from Jan.

1 if a deal on new gas prices to its neighbour was not reached by midnight on Sunday. Minsk said it would retaliate by halting Russian gas crossing the country on its way to Western Europe.

The gas row revived memories of a similar dispute with ex-Soviet Ukraine exactly one year ago which briefly disrupted Russian deliveries to Europe and shook confidence in Russia's reliability as an energy supplier.

Russia supplies about a quarter of Europe's gas needs and Gazprom ships about 20 percent of the gas it exports to Europe via Belarus, with the rest going via Ukraine to the south.

The contract under which Gazprom has been supplying gas to Belarus expires at midnight on Sunday. By comparison, Gazprom charges European customers over 0.

Gazprom says the price increase for Belarus is part of the firm's campaign to bring the amounts Russia's ex-Soviet neighbours pay for their gas into line with world prices.

In the past 12 months, Russia has agreed hefty price rises with ex-Soviet Ukraine, Georgia, Armenia and Moldova.

Western critics have accused the Kremlin of using the gas price increases as a political weapon to punish some of its neighbours for moving closer to the West.

Belarus though does not appear to fit into that category.

Its President Alexander Lukashenko has quarrelled with the West, which accuses him of abusing human rights, and seeks closer ties with Moscow.

Reuters DH VP0432

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