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Russia, Belarus discuss gas price for 2007 -1

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MOSCOW, November 17 (RIA Novosti) - The heads of Russian energy giant Gazprom and Belarusian pipeline company Beltransgaz met Friday to discuss the price of Russian natural gas for Belarus in 2007, Gazprom said Friday.

Belarus is the only post-Soviet state still paying under $50 per 1,000 cubic meters of gas - about Russia's domestic price level. The gas giant earlier announced a four-fold increase, to $180-200, for the country as of 2007, closer to the European average of $230.

"Our objective at talks is to switch to free market prices for natural gas supplies to Belarus," the press service quoted Gazprom CEO Alexei Miller as saying.

The monopoly said Miller and Beltransgaz General Director Dmitry Kazakov also discussed an independent valuation of Belarus' pipelines being conducted by ABN Amro, the auditor chosen by Minsk. The assets could be used to pay for gas supplies.

Gazprom has long sought to buy Belarus' pipelines, which pump Russian energy resources to European markets, but the countries have so far failed to agree on the issue.

The Belarusian president, who has blasted the price hike proposals as tantamount to "severing economic ties" between the long-standing allies, told the government Friday to find ways to compensate for the blow the Belarusian economy could suffer from the increase.

"We must find compensatory schemes and propose that Russia should make up for the losses," Alexander Lukashenko said, suggesting Russia should now be made to pay for Belarusian services which it had to date enjoyed free of charge.

Lukashenko said around 100 million metric tons of Russian cargo passes through Belarus every year without paying transit fees. Belarus, which he described as Russia's outpost in the West, does not charge Russia for its military facilities deployed on its territory. He also suggested Belarusian products could appreciate for Russia in the wake of the price rise.

Lukashenko has insisted that gas prices should be of the same level for Belarus and Russia, which are building a Union State, envisioning a common economic, customs, and political space. The neighbors have been negotiating the union since 1997, but talks have largely stalled over a host of issues, the gas price among them.

The strongman also urged his small nation to use alternative energy sources, saying the country could resort to firewood if necessary.

Gazprom is expected to supply 19.5-21 billion cubic meters of gas to Belarus in 2006.

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