Russia, Belarus begin gas negotiations

Belarus's top gas negotiator was in high-level talks in Moscow today, raising hopes of a last-minute deal in a pricing dispute…

Belarus's top gas negotiator was in high-level talks in Moscow today, raising hopes of a last-minute deal in a pricing dispute that threatens to disrupt Russian gas supplies to Europe from New Year's Day.

Russia's gas monopoly Gazprom has said it will cut gas supplies to Belarus from tomorrow morning if no deal is reached, while Minsk said it would retaliate by halting flows of Russian gas crossing the country bound for Western Europe.

About 20 per cent of Russian gas exports to Europe go through Belarus. A similar dispute between Gazprom and Ukraine a year ago briefly disrupted supplies to Europe

Gazprom spokesman Sergei Kupriyanov said Belarus's First Deputy Prime Minister Vladimir Semashko, who has led talks with the Russian company, had flown to Moscow and started talks with Gazprom's top managers.

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"We haven't reached a deal yet, but Gazprom is doing its best to sign all the necessary documents in the time left (before the New Year)," Vesti 24 state television quoted Mr Kupriyanov as saying.

Until now the two sides had been communicating by fax, and it was understood Mr Semashko would only travel to Moscow in person if there was a real chance of signing a deal.

Russia supplies about a quarter of Europe's gas needs. Eighty per cent of the exports pass through Ukraine and the rest through Belarus.

Germany - one of the biggest customers for Russian gas - and the European Union have pressed Moscow and Minsk to reach a deal quickly and avoid any disruption to supplies.

Gazprom is seeking to bring the heavily discounted prices paid by former Soviet neighbors closer to world market levels. It is demanding Belarus pay $105 per 1,000 cubic meters of gas from 2007, up from the $46 it pays at the moment.