In furtherance of the accords reached on November 25, Gazprom and Beltransgaz signed yesterday an addendum to the contract on the volumes and terms of gas supplies to the Republic of Belarus and gas transit via the Republic between 2007 and 2011.

Pursuant to the document, Beltransgaz shall partially pay for natural gas supplied by Gazprom in the second half of 2011 at the rate of USD 244.8 per 1,000 cubic meters, instead of the prices for the third and the fourth quarters calculated on the basis of the contract (USD 279.16 and USD 305.72 respectively).

The remaining amount of payment for Russian gas supplied in the second half of 2011 will be settled by Beltransgaz in monthly installments during 2012.

Background

Before December 31, 2011 (inclusive) the terms and conditions for Russian gas supply to and transmission across Belarus are defined by the gas supply and transit contract for 2007–2011 signed between Gazprom and Beltransgaz. The document prescribes that the gas price for Belarus is calculated under a formula (corresponding to the price formula for Russian gas supplies to Europe). Between 2008 and 2010 discount rates (0.67, 0.7 and 0.9 respectively) were used for determining the price.

On November 25, 2011 the Russian Federation Government and the Government of the Republic of Belarus signed:

• the Agreement on the prices (tariffs) formation procedure for natural gas supply to the Republic of Belarus and transmission via the gas pipelines located in the Republic of Belarus;
• the Agreement on the terms and conditions for shares purchase and sale, and further activities of Beltransgaz.

In furtherance of the above mentioned documents, Gazprom and Beltransgaz signed on November 25, 2011 contracts for gas supply to Belarus and gas transmission via the Republic for 2012–2014. In addition, Gazprom and the State Property Committee of the Republic of Belarus entered into the purchase and sale contract for a 50 per cent stake in Beltransgaz. Taking account of the 50 per cent stake in Beltransgaz acquired by Gazprom between 2007 and 2010, Gazprom becomes the owner of 100 per cent of Beltransgaz shares.