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Gazprom, Belarus close deal at last minute

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MARK AUSTIN THOMAS: The long standing back-and-forth between Russia’s gas giant, Gazprom, and Belarus has ended. The two parties signed an agreement just hours before their deadline. From Budapest, Stefan Bos reports.

STEFAN BOS: After days of heated debate, it seems that Belarus and Russia will keep Europe warm this winter, after signing a five-year contract for gas supplies.

Belarus has reluctantly agreed to pay more than double the price it paid for gas in 2006. In 2007, Belarus will pay $100 per 1,000 cubic meters of Russian gas, up from $46 dollars last year.

Russia had threatened to cut off supplies to Belarus if no deal was reached. In retaliation, Belarus planned to interrupt Russian gas supplies to the rest of Europe.

Despite the agreement, Belarus’s autocratic President Alexander Lukashenko isn’t a happy man.

[Lukashenko speaking Russian]

He says Russia “already rose prices in the past. And then they say we have to be happy? It’s blackmail.”

Robert Legvold, a Russia expert at Columbia University, says the tensions show that Moscow is not so committed to President Lukashenko.

ROBERT LEVGOLD: I don’t think it means that they are about to begin forcing Lukashenko to transform the situation politically within Belarus, but I think it’s a clear signal that they have their own separate interests and they are not about to simply give him large gifts because they want to be close.

And concern remains in Europe over the longtime future of Russian gas supplies.

In Budapest I am Stefan Bos, For Marketplace.

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