Russia and Belarus have settled all disputable gas-related issues, with token exceptions, President Putin said to the media after the summitry.
"We have no problems at all-we are buying as much gas as our economy and population need. We have only one issue unsettled and, I hope, it is receding into the past-Russian gas prices and European transit tariffs. I think we settled it today," President Lukashenko said, in his turn.
Russia and Belarus were together to set up a gas-piping joint-stock company, deadline July 1, 2003, said a bilateral agreement of April 12, 2002, on closer gas industry cooperation.
The joint venture was to tackle Russian gas exports to Belarus and, via it, on to Western Europe.
The Belarussian government addressed Mikhail Kasyanov, then Russia's Prime Minister, June 30, 2003, to offer its concept of the joint venture, with the two countries' head gas companies participating-Gazprom for Russia, and Beltransgaz, for Belarus.
Belarus was offering the following terms:
- it was to hold a control block-50 per cent plus one share-of the new company;
- Belarus was to receive 18.5 billion cubic meters of natural gas, 2003, with the amount gradually increasing to reach 33 billion cubic meters by 2010;
- Beltransgaz Co. was to sell its stock on a market price, which Belarus estimated at $5 billion;
- $1.7 billion was to be invested in the Belarussian gas-piping network to update and extend it, and ensure its capacity used to the full, including the Belarussian stretch of the Yamal-Europe export-oriented mainline, with transits to reach an annual 100 billion cu m between 2003 and 2011;
- Gazprom Co. was to offer the Belarussian stretch of the Yamal-Europe mainline, then under construction, as its non-monetary contribution;
- Beltransgaz Co. was entitled to personnel social welfare maintained to the full.
After Russia analyzed the proposal and estimated economic efficiency of the prospected joint venture, it came out with a return concept of participation:
- Russia was to purchase Beltransgaz control block-possibly, at a contract price, proceeding from a $580 million established balance cost;
- the joint venture was to make monetary payments for the Gazprom share, and pay gas import arrears;
- Gazprom future-oriented plans prognosticated natural gas export amounts to Belarus, proceeding from the latter's natural gas consumption increasing to an annual 19.9 billion cu m, in conformity with Beltransgaz application;
- Beltransgaz basic assets demanded an independent evaluation;
- it was not expedient to include the Belarussian stretch of the Yamal-Europe mainline in the authorized joint venture capital. If it were, transport tariffs would rise with joint venture amortization expenditures and profit rates included, and mainline control would be lost;
- the joint venture was to receive the right to sell gas on direct contracts with purchasers in an amount of half the Belarussian-sold gas-an arrangement that promised Gazprom investment in the joint venture to be recouped within normative terms, i.e., before 2013;
- social welfare issues were within joint venture competence.
Belarus took a non-constructive stance on key issues of joint venture establishment, so Gazprom was forced to appeal to Russia's Cabinet in written form to denounce the intergovernmental agreement of April 12, 2002, which envisaged equal terms in price-formative policies.
