Russia, Belarus Stand Ground in Dispute

Belarusian Yevgenia Lukshits puts wood into a stove to warm her house in the village Gaina, 45 km (28 miles) north of Minsk, Belarus, Tuesday, Dec. 26, 2006. Talks failed on Tuesday between Belarus and the Russian state gas monopoly on Russia's demand for a price increase, and a top company official said Belarus could face a New Year's gas cutoff. (AP Photo/Sergei Grits) (Sergei Grits - AP)

MOSCOW -- Russia and Belarus stood their ground Wednesday in a dispute over natural gas prices, with Russia's state-run gas monopoly OAO Gazprom setting the clock ticking toward a Jan. 1 supply cutoff if its neighbor does not agree to pay more.

Belarus warned that a suspension of supplies could jeopardize deliveries across its territory to Gazprom clients in European Union member states _ a threat targeting Russian concerns of a repeat of the blow its image suffered when a cutoff of deliveries to Ukraine a year ago led to brief supply disruptions in Europe.

Gazprom, which is demanding that Belarus pay more than twice the current price for gas next year and hand over a 50 percent stake in its gas distribution system, refused to back down despite the threat from Minsk.

"If a gas supply contract for next year is not reached, Gazprom will have no grounds for deliveries of gas to Belarus as of 10 a.m. Moscow time (0700GMT) on Jan. 1, 2007," Gazprom chief Alexei Miller said in televised comments.

Miller said that Gazprom would supply gas for European consumers to the Russia-Belarus border in full compliance with its contracts. But he also said the company sent letters to Germany, Poland and Lithuania informing them about "the developing situation regarding gas supplies to Belarus," suggesting concern about disruptions in deliveries to those countries.

About 30 percent of Russian gas supplies to Europe transit through Belarus, much of it to Germany, Poland and Lithuania.

Gazprom officials had threatened to halt supplies meant for Belarusian consumption if no contract was signed before the existing one expires Dec. 31, but Miller's comments marked the first time the company set an hour. He said fresh talks Wednesday had failed, blaming what he called Belarus' "destructive position."

The remarks came after Belarusian First Deputy Prime Minister Vladimir Semashko shrugged off the threat of a suspension, warning that Gazprom relies on Belarus for transit to Europe and could not risk the international criticism it faced during the Ukraine dispute.

Russia, the world's largest gas producer, provides a quarter of Europe's gas consumption.

"I don't think Gazprom will resolve to cut off gas to Belarus _ they shouldn't step on the same rake twice," he said.

"We are interconnected," Semashko said after unsuccessful talks Tuesday with Miller. "I have no contract with Mr. Miller on deliveries to Belarus from Jan. 1, and Mr. Miller has no contract on transit through Belarus."

Gazprom spokesman Sergei Kupriyanov said the company, which initially insisted Belarus pay $200 per 1,000 cubic meters of gas next year but is now asking for $105, is not prepared to go lower.