Medvedev urges Gazprom to draft and sign contract with Belarus in due time

SOCHI, August 15 (Itar-Tass) —— President Dmitry Medvedev advised Gazprom that when drafting a new gas contract with Belarus it should try to avoid a situation of five years ago when a similar document was signed several minutes before New Year’s Day.

Gazprom CEO Alexei Miller told Medvedev on Monday, August 15, that the start of negotiations with Belarus was scheduled for September.

“As for the contract for the purchase of gas, we plan to begin negotiations with our Belarusian colleagues in September and assign a new contract before the end of the year,” he said.

“The situation on the hydrocarbon market is not simple for consumers, and gas prices are high, which is a sensitive issue for former Soviet republics, including Belarus,” Miller said.

“I think we will sign the contract by all means by the end of the year, and there certainly be no repetition of the situation we had five years ago when we signed a contract at 23:58 on December 31, 2006,” he said.

“Finalise it, of course. We do not need situations like five years ago. You have to come to consensus,” Medvedev said.

He also said that a new gas contract with Belarus should take into account the existence of the Customs Union and the acquisition of the second package of Beltransgas shares.

The current gas contract between Russia and Belarus expires this year.

“There are tangible conditions that affect the contents of the relevant contract: the emergence of the Customs Union [of Russia, Belarus and Kazakhstan], our economies have become closer to each other, and this must be taken into account,” Medvedev.

“Second, the acquisition of the remaining 50 percent of Beltransgas. This creates somewhat different conditions for the presence of Russia and Gazprom in the Belarusian market. And I think it would be right to take this into account when drafting the contract,” the president said.

Belarusian Prime Minister Mikhail Myasnikovich said Russia and Belarus would settle all issues concerning oil and gas purchases within a month.

“We have agreed that all questions will be resolved within the next month, primarily those concerning oil and gas purchases in 2012,” he said after a meeting of the Council of Ministers of the Russia-Belarus Union State and talks with Prime Minister Vladimir Putin.

Russia will start using a decreasing coefficient in gas trade with Belarus from 2012, Putin said.

He said the coefficient would be determined by business entities during commercial talks.

“Russia has made the decision to introduce an integration decreasing coefficient in the gas pricing formula for Belarus from January 1, 2012. It will be determined by business entities. We believe that we should have equal conditions of competition for all business and economic entities [in the Union State]. And energy plays an important role in this,” Putin said.

“We hope that this [introduction of the decreasing coefficient] will be synchronised with the acquisition by Gazprom of Beltransgas where it already owns 50 percent of shares,” the prime minister said.

Russia is Belarus’ main oil and gas supplier. Under the Russian-Belarusian intergovernmental agreement signed in December 2010, Russia has cancelled the oil export duty for Belarus from January 1, 2011. The document entered into force shortly after Belarus had ratified a set of agreements on the Common Economic Space. However, as the issue of oil prices remains unresolved, Russian oil companies suspended oil exports to Belarus at the start of the year until new contracts were signed. Russia will supply 21.7 million tonnes of oil to Belarus this year.

In late 2006, the two countries signed a contract on Russian gas export and transit for 2007-2011 that envisions a gradual transition from preferential gas prices to the world ones in 2011. A decreasing coefficient was applied to gas supplies for four years. In 2009, amidst the global financial crisis, Gazprom cut it from 0.8 to 0.7, but raised it back to 0.9 in 2010.

However, Minsk insists on cutting the Russian gas export price in 2011. Gazprom Deputy CEO Valery Golubev said the average gas export price would reach around 250 U.S. dollars this year. Belarus plans to buy 22.5 billion cubic metres of Russian gas in 2011.


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