Saturday, May 19, 2007

Russia, Belarus sign crucial gas transit deal

MOSCOW (AFP) - Russia and Belarus signed a critical gas transit deal on Friday forged to avert export disruptions to Europe, Gazprom said.

"According to the agreement, Gazprom will acquire 50 percent of Beltransgas for 2.5 billion dollars," the Russian gas giant said in a statement, referring to Belarus' national pipeline operator.

The deal ends a gas dispute between the two countries that came to a head late last year when Gazprom announced a steep hike in the price it charged Belarus for natural gas.

In a dramatic midnight deal on December 31, Belarus agreed to pay 100 dollars per 1,000 cubic meters of Russian gas in 2007, a substantial increase from the hugely-subsidized 45 dollars it had paid before that.

The deal also let Gazprom purchase half of Beltransgaz, and approximately doubled the price Gazprom pays for transit rights to pump gas to European markets through Belarus' territory.

Gazprom rattled observers earlier Friday by announcing that the signing would be put off to a later date -- underscoring Europe's dependence on energy supply arrangements in the former Soviet Union over which it has little control.

About 20 percent of Russia's gas supplies to Europe transit through Belarus.

News of the possible delay came as Russian President