UPDATE 2: Belarus fully repays $726.2 mln debt for gas to Gazprom

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MOSCOW, Apr 13 (PRIME) -- Belarus has fully redeemed its U.S. $726.2 million debt to Russian gas giant Gazprom for gas shipped in 2016–2017, the company said in a statement on Thursday.

“The Belarusian side has fully, to the sum of $726.2 million, repaid the overdue receivables to Gazprom for supplies of Russian gas in 2016–2017,” Gazprom said.

Earlier on Thursday, Russian Prime Minister Dmitry Medvedev said that Belarus had provided additional debt redemption guarantees to Gazprom, but Russia would wait for the repayment before fulfilling the oil supply agreement.

“We’ve received additional promises and guarantees yesterday from the government of Belarus on the finished dispute. We expect the debt to Gazprom to be returned and after that we will proceed to the fulfillment of the agreements we are considering today,” Medvedev said.

He also said that Russia and Belarus have reached a compromise on the oil and gas issues.

“We have made decisions suiting both sides today, and what is important they are in general understandable and transparent. The first protocol envisages Russian crude supply from 2017 to 2024 to amount to 24 million tonnes a year by pipeline,” Medvedev said.

“The second establishes the order of gas price formation for Belarus until December 31, 2019 and elaboration of proposals under a program to form a united gas market of the Eurasian Economic Union by 2025 until January 1, 2018.”

Deputy Prime Minister Arkady Dvorkovich said that Russia and Belarus had signed four documents which fully settle the oil and gas disagreements. Three agreements settle the intergovernmental relations and the fourth one is with Gazprom.

Russian gas will cost less than $130 per 1,000 billion cubic meters for Belarus, he said.

“Concerning the discount, final figures will be announced by an official representative of Gazprom after the signing of corresponding documents. The point is that reducing coefficients will be applied to the contract price, which will drive the prices to the level agreed upon beforehand, stipulated by our agreements. These are prices which are, I can say straightaway, lower than $130,” Dvorkovich said.

Belarus will have an opportunity to additionally subsidize the final prices for consumers, Dvorkovich said.

He also said that Belarusian refineries will process no less than 18 million tonnes of Russian oil and Minsk will not re-export Russian oil.

Russia and Belarus can decide on the creation of a united gas and electric power market in several months, Dvorkovich also said. Negotiations over a united market of the Eurasian Economic Union are scheduled to take place in several months but if no agreement is reached between all members, Russia and Belarus can sign bilateral agreements.

In early 2016, Minsk said that Russian prices for gas are unfair and started paying less for it unilaterally. Moscow cut duty-free oil supplies to Belarus saying there were shortfalls in duty-free oil product shipments to Russia, which Minsk was to carry out in return for the oil.

Belarusian Deputy Prime Minister Vladimir Semashko said earlier that Minsk had agreed with Moscow on resumption of oil supplies in the previous volume of 24 million tonnes annually until 2024. Supplies will be resumed no later than on Thursday (April 13), he said.

Dvorkovich said earlier that Belarus will pay over $720 million to Gazprom, while Gazprom will provide a discount on gas supplies to Belarus for 2018–2019.

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