Gazprom has received the last payment from Beltransgaz as settlement of the debt for Russian gas deliveries in the first half of 2007. Beltransgaz cleared thus its overdue arrears to Gazprom.

Gazprom will export gas to Belarus under the existing Contract provided current deliveries are paid for in full and in time.

Gazprom hopes that the Belarusian partners will strictly abide by all of the accords achieved as regards the terms and conditions of Russian gas supply and transit.

Reference:

On December 31, 2006 Gazprom and Beltransgaz signed the Gas Supply & Transit Contract for 2007 through 2011. The Contract fixed the price of Russian gas for 2007 (US$ 100 per 1,000 cu m) and the pricing formula starting from January 1, 2008 (which is in line with the Russian gas supply pricing formula for Europe).

Additionally, pursuant to the Contract, the Belarusian side paid 55 per cent of gas supply in the first half of 2007 on the condition of repaying the remaining sum until July 23 and switching to 100 per cent gas supply payments from July 1.

The Contract also fixed the tariff rate for gas supply by the Beltransgaz owned networks (US$ 1.45) and the service charge for the Yamal-Europe gas pipeline operation (calculated under a formula).

On December 31, 2006 Gazprom and the Government of the Republic of Belarus signed the Protocol stipulating that Gazprom would pay US$ 2.5 bln in equal portions for a 50 per cent stake in Beltransgaz within four years.

The payment deferral during January-June 2007 accounted for US$ 456.16 mln. In violation of the existing Contact the payments were not arranged and their effectuation guarantees were not presented. At the same time, Gazprom timely committed US$ 625 mln to purchase a 12.5 per cent stake in Beltransgaz.

To that end, Gazprom sent under the Contract an official notification to Beltransgaz on a 45 per cent decrease of gas supply to the Republic of Belarus starting 10:00am August 3. However, since on August 3 Beltransgaz made the first payment for a larger part of the debt, the decision was taken to delay a reduction of gas supply to the Belarusian consumers on the condition the debt was to be fully repaid within a one week period.