UPDATE 1-Gazprom says Belarus deal agreed, no gas cuts for EU

Thu Nov 24, 2011 3:36pm GMT

Quotes

   

* Says will buy Belarus pipeline operator

* Will ink a new gas deal with Belarus on Friday

* Risk of new year gas war reduced (Adds detail , quotes)

By Denis Dyomkin

PETROZAVODSK, Russia, Nov 24 (Reuters) - Russian gas export monopoly Gazprom will buy a Belarus pipeline operator and sign a new gas deal with Minsk on Friday, a move that will help to avoid potential gas supply cuts to Europe, the company's CEO said on Thursday.

"Do you know what will happen tomorrow? We will acquire 100 percent of (pipeline operator) Beltransgaz," Gazprom's Alexei Miller told reporters.

Russia's biggest company already owns 50 percent of Beltransgaz and is prepared to pay $2.5 billion for the remaining stake.

On Friday, Russian President Dmitry Medvedev is scheduled to meet his Belarussian counterpart Alexander Lukashenko. Russian government sources have said that Russia and Belarus would sign a gas deal on later during the week.

Russia's current five-year gas agreement with Belarus expires on Jan. 1. Markets have been following the talks, as previous disagreements between Moscow and transit countries have hit export flows to the European market.

Gazprom has said Belarus paid $279.16 per 1,000 cubic metres of Russian gas in the third quarter. The price was expected to rise to $286 in the last three months of the year -- well below the $446 European customers are paying in November on average.

Gazprom, which expects to ship 152 billion cubic metres (bcm) of gas to Europe this year, sends around 20 percent of the fuel to the European Union through Belarus, the rest goes via Ukraine. Earlier this month the company launched direct gas supplies to Germany at the pace of 27.5 bcm a year through the undersea Nord Stream pipeline.

Miller said Gazprom's contract with Ukraine -- another country which Russian gas must travel through on its way to Europe -- is valid and unlikely to be revised.

Ukraine has also been clamouring for Russian gas price cuts, but Moscow has so far been adamant that it should stick to a 10-year contract signed in 2009.

"We have a current contract with Ukraine on gas supply and transit. It has been implemented and Ukraine will abide by it," Miller said after being asked if there was a threat of another gas supply cut to Europe due to a possible spat with Russia's neighbour.

CHINA

Miller also said he didn't see any implications for Gazprom's gas talks with China from a recent agreement between Beijing and gas-rich Turkmenistan, which on Wednesday agreed to increase its planned supply of gas to the world's top energy consumer by 25 billion cubic metres.

"It won't affect our offer (to China)," he said.

Russia's has been involved in gas talks with China for years, but the negotiation hit a dead-end over pricing.

Sources said Russia was not willing to lower its offered price of $250 per 1,000 cubic metres. China is weighing its options on sources of fuel for its fast-developing economy, and Turkmenistan is seen as one of the key energy suppliers for Beijing. (Reporting by Denis Dyomkin; writing by Vladimir Soldatkin; editing by John Bowker and Jason Neely)

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