Russia-Belarus gas delivery standoff ends; European deliveries via Belarus resume

March 5, 2004
Russia's Gazprom and TransNafta have resumed natural gas deliveries to Belarus, reported Interfax news agency. Gasprom had ceased deliveries the first of the year and TransNafta's contract expired Feb. 18.

By OGJ editors

HOUSTON, Mar. 5 -- Russia's Gazprom and TransNafta have resumed natural gas deliveries to Belarus, reported Interfax news agency. Gasprom had ceased deliveries the first of the year and TransNafta's contract expired Feb. 18. At that time, Belarus, which depends totally on Russia's energy resources, said it had stocks of 600 million cu m of gas, enough for only 10-20 days to survive and meet basic needs. Belarusian President Alexander Lukashenko, denouncing what he called Russian "terrorism", has agreed to buy Russian gas on Moscow's terms.

Gazprom supplies one fourth of Europe's gas needs, with 17% of that delivered through Belarus, but analysts said it would be a week before European consumers other than Belarus would feel the effects of the cut-off.

While Russia and Belarus worked to resolve their dispute, Gazprom began supplying gas to Lithuania and Russia's western enclave of Kaliningrad through Latvia. Poland's gas monopoly, which said it faced about a 10% shortfall in supplies, made arrangements to tap its 10-20 day store of gas and to receive Russian gas deliveries via Ukraine, through which Russia's biggest gas customer, Germany, receives most of its Russian gas.

The Russia-Belarus quarrel involved several issues: Belarus wanted to receive the same amount in transit fees from Russia as neighboring Ukraine does. Moscow, for its part, no longer wanted to sell Belarus gas at Russia's domestic prices, and it charged Belarus with failing to pay for gas supplies. Gasprom also charged that Belarusian gas pipeline operator Beltransgaz, which carries Russian gas to Western markets, was siphoning off gas intended for Poland and Lithuania.

During the standoff, Gasprom was said to have lost $10 million/day in deliveries.