Gas talks between Belarus and Gazprom - Belarus's sole gas supplier - did not result in any agreement Tuesday, as Gazprom wanted Belarus to pay $75 per 1,000 cubic meters in cash plus $30 in shares of the Belarusian government-owned pipeline company. Belarus says it is ready to pay only $75 in cash.
"There was a provocation on the part of Gazprom. The Belarusian side was heading [for Moscow] on Gazprom's invitation to sign a contract on gas supplies and transit," Vladimir Semashko told journalists in the Belarusian capital Minsk Tuesday.
Semashko said that initially there was a preliminary agreement that Belarus will pay a total of $75 for 1,000 cu m in 2007, with the price reaching average European levels of $250 per 1,000 cu m by 2011, but that later Belarus was offered quite different terms.
The head of Gazexport, Gazprom's export arm, Alexander Medvedev said Tuesday that Russia's proposal to Belarus was "more than beneficial." Gazprom also agreed Tuesday that Beltransgaz was valued at $5 billion.
Semashko said he believes talks on Russian gas deliveries will resume next year. "I think talks must be continued, but Gazprom should give a signal, and Mr. Miller has to come to Minsk," he said.
Semashko said Belarus will proceed from the current contract, expiring in four days, if a new contract is not signed by January 1, 2007. Belarus, which is building a Union State with Russia, today pays a discounted rate of $46.68 per 1,000 cu m of natural gas, and the transit rate is $0.75 per 1,000 cu m.
The first deputy prime minister said that if the gas price for Belarus rises, Belarus will raise the cost of transit, which will be $1.3 per 1,000 cu m if the price for Russian gas is $75 per 1,000 cu m, and $1.65 if the price is $110.
"No contract for gas supplies means no contract for gas transit via Belarus," Semashko said.
He said Russia annually transports 44 billion cu m of gas through Belarus.
Asked what will happen if Russia cuts off gas supplies, Semashko said Gazprom could totally suspend gas supplies but gas for Germany and Lithuania, stored in Gazprom's storage facilities on the territory of those countries, will last for only 12-13 days.
Semashko said he hopes Gazprom will not cut off gas for Belarus January 1. "I hope Gazprom management will not make such a decision. There are smart people there and they won't make the same mistake twice," he said.
During a price spat with Ukraine in January, Russia briefly cut off gas supplies to its neighbor, and later Ukraine started siphoning off Europe-bound gas during the halt in supplies. The situation aroused concerns in Europe about Russia's reliability as a gas supplier.