Putin Promises Gas Discount for Belarus in 2012

Starting from 2012 Russia is planning to include an additional integration decreasing coefficient into the gas pricing formula for Belarus, Russian Prime Minister Vladimir Putin said at the press-conference after the session of the Union State Council of Ministers in Moscow on 15 August. He added that the size of this coefficient will be defined in accordance with the agreements of the economic entities.

“We expect that this process will be simultaneous with the acquisition of the remaining 50% of Beltransgaz by Gazprom”, — Vladimir Putin pointed out.

The prime-minister emphasized that the additional discount on gas is not a gift to Belarus but direct help and support.
The operating contract between Gazprom and Beltransgaz was signed on December 31 2006 and is expiring this year. In particular this document defines the pricing formula since January 2008 (it relates to the pricing formula of the Russian gas export to Europe), as well as decreasing coefficients of the price for 2008-2010 (0.67, 0,8 and 0,9 respectively). Prime Minister of Belarus Mikhail Myasnikovich in his turn expressed the hope that in 2012 the decreasing coefficient will not exceed 1.

Earlier the Gazprom shareholders approved of signing agreements with OAO Beltransgaz on Russian gas delivery to Belarus and its transit through the territory of this country. In accordance with the supply contract in 2012-2014 Gazprom is to sell to Beltransgaz no more than 69 billion of cubic meters of gas in the total ceiling amount of 17.25 billion dollars.

Besides, in 2012-2014 Beltransgaz is to provide services of transporting gas in the transit mode through the territory of Belarus in the volume of no more than 142 billion cubic meters, and Gazprom is to pay for the service of transporting gas via the cross-country gas pipe-line in the total ceiling amount of 1.8 billion dollars.

The further discussion of the new contract with Belarus and the purchase of 50% of Beltransgaz shares are planned on multilateral basis. The negotiations are to start in September. Gazprom already owns a stock of 50% of Beltransgaz shares, now the parties are carrying out the negotiations on selling the Russian concern the remaining 50% of shares which belong now to the state of Belarus.

Earlier Gazprom confirmed the willingness to pay 2.5 billion dollars for the remaining 50% of OAO Beltransgaz.

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