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Russia to cut gas supplies to Georgia if no contracts signed

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Alexander Medvedev, who heads the company's export arm Gazexport, said Georgia is able to pay the proposed price of $230 per 1,000 cu m, "which corresponds to the level of all countries."
MOSCOW, November 7 (RIA Novosti) - Russian energy giant Gazprom [RTS: GAZP] said Tuesday it will cut off natural gas supplies to Georgia, and supply gas via Georgian territory for Armenia only, if no contract is signed.

Alexander Medvedev, who heads the company's export arm Gazexport, said Georgia is able to pay the proposed price of $230 per 1,000 cu m, "which corresponds to the level of all countries."

Russia and Georgia remain entangled in a diplomatic feud that began in September over Tbilisi's brief detention of Russian officers on spying charges. Russia has imposed mail and transport bans on its neighbor, deported hundreds of Georgians, and cracked down on 'illegal' Georgian businesses.

Medvedev also said there will be no subsidized gas prices for members of the Commonwealth of Independent States, an alliance of former Soviet republics.

Gazprom is seeking to raise gas prices for its ex-Soviet neighbors, including Georgia, Ukraine, Belarus, and Moldova, to average European levels of around $230 per 1,000 cubic meters.

Medvedev said Georgia might partially pay for Russian gas by selling stakes in some of its assets, and that Gazprom has informed Georgian authorities on which assets the company is interested in, but has received no answer.

Georgian Foreign Minister Gela Bezhuashvili said last week the price increase is politically motivated.

"Politics accounts for the greater part of this price," Bezhuashvili said. "Russia must show us a basic price formula."

But Medvedev said Gazprom had submitted to Georgian authorities all related documents on revised prices from the current $110 to $230 per 1,000 cubic meters in 2007 long time ago.

Before the current standoff, relations were already strained between the ex-Soviet neighbors over the presence of Russian peacekeepers in the breakaway Georgian regions of Abkhazia and South Ossetia, and Russia's bans on Georgian goods.

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