Gazprom, Belarus to sign gas supply contract shortly :: Charter'97 :: News

When Russian Prime Minister Mikhail Fradkov visits Minsk on Tuesday, a contract is expected to be signed by Russian gas monopoly Gazprom on gas supplies to Belarus in 2004, a source in the Russian government told Interfax on Monday.

"The probability is high that the prime minister`s visit will culminate in the signing of a contract between Gazprom and [Belarusian gas distributing company] Beltransgaz," the source said. The draft document needs a few final touches for both sides to agree to sign it, he said.

Gazprom cut supplies to Belarus on January 1, 2004 when the term of the previous contact ended. Since then the two sides have not been able to agree on gas prices or on the setting up of a joint gas supply venture between Gazprom and Beltransgaz.

Contracts between independent gas suppliers and Belarus are due to expire on June 12, the source said. Belarusians will agree to the Gazprom-proposed price for Russian gas but demand higher rates for the transit of Russian gas across Belarus, he said.

The setting up of a Russian-Belarusian joint venture for gas supply using Beltransgaz equipment will be high on the agenda of the Minsk talks, the source said. The two sides disagree on the value of Beltransgaz`s assets. Gazprom says they are worth $600 million, and Belarus $5 billion.

Deloitte and Touche is expected to complete an independent audit of Beltransgaz`s assets in the fall, following which the two sides will make a final decision on the conditions for setting up a joint venture.

"We feel that $5 billion is an unrealistic evaluation," the source said.