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Gazprom mounting gas pressure on Belarus - paper

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Russian energy giant Gazprom plans to quadruple the natural gas price for Belarus unless the former Soviet republic agrees to sell its main pipelines to Europe, a daily said Tuesday.

MOSCOW, May 30 (RIA Novosti) - Russian energy giant Gazprom plans to quadruple the natural gas price for Belarus unless the former Soviet republic agrees to sell its main pipelines to Europe, a daily said Tuesday.

Kommersant said that after raising prices for Ukraine, Moldova and Lithuania, Gazprom said it would pursue a European price formula for Belarus from 2007, which would be $200 per 1,000 cubic meters against the current $46.68. Earlier reports suggested that the company was after $147 per 1,000 cu m.

But Alexei Gromov, a senior researcher with the Moscow-based Institute of Natural Monopolies Research, told Kommersant that $200 or more per 1,000 cu m was unrealistic for Belarus: "This offer is designed to put pressure on the country's authorities, who are refusing to let Gazprom take full control of their gas pipeline network."

The paper said Gazprom had offered to compensate partially for the price hikes if Belarusian gas pipeline company Beltransgaz sold the Russian giant its main gas routes.

In 2003, the two parties failed to agree on the price of the assets, with Gazprom insisting on $1 billion and Belarusian President Alexander Lukashenko sticking to $5 billion, Kommersant said.

The paper said the changes in Gazprom's policy on Belarus were only part of an ambitious plan to secure control over the pipelines of the former Soviet Union in view of the European gas market's liberalization. However, the company has so far failed to hammer out deals with the majority of ex-Soviet republics, including Ukraine and Moldova.

Speaking at an international conference in Berlin recently, Alexander Mikheyev, deputy department head with Gazprom, said prices for Ukraine, Moldova, Belarus, Lithuania, Latvia and South Caucasus countries would be brought closer to the European level of $250. In this context, the price for Belarus can be expected to reach $220-230, considering its proximity to Russia, Kommersant said.

Mikheyev also said Gazprom hoped to win over Central Asian countries by offering them higher prices for their natural gas. For example, the Russian and Kazakh presidents agreed in Sochi last week that Gazprom would buy Kazakh gas for $140 next year, which is three times more than it is paying now.

Kommersant said Gazprom chief executive Alexei Miller, Belarusian Energy Minister Alexander Ozerets, and Beltransgaz Director General Dmitry Kazakov would meet in Moscow on June 1 to discuss transition to the new price structure. However, a source in Gazprom told the paper that the talks were not expected to yield any substantial results.

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