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December 27, 2005

Gazprom and Beltransgaz ink Gas Supply and Transit Contract for 2006

Today, at Gazprom’s Head Office, Alexander Ryazanov, Deputy Chairman of Gazprom’s Management Committee and Dmitry Kazakov, Director General of Beltransgaz have inked a Gas Supply and Transit Contract for 2006.

Under the Contract, Gazprom will provide Belarus with 21 bcm of gas, of which 1.5 bcm to be supplied provided there is technical capacity available.

The gas price and transmission tariff will remain at this year’s level.

“Gazprom is switching to market rates of gas supply and transit for all the countries importing Russian gas. Belarus is not an exception. When determining the gas supply and transit price for Belarus over 2006, Gazprom has taken into account the following circumstances.

Firstly, Russia and Belarus are in the process of establishing a common union state, which implies using common standards when drafting financial and economic parameters of the two countries.

Secondly, in 2005 Gazprom has registered all the necessary documents, under which the company is owner of the Belarusian section of the Yamal-Europe gas main carrying over 50 per cent of the Russian gas exported through Belarus. Furthermore, starting this year the land under said pipeline is held by Gazprom on a long-term leasehold basis.

Thirdly, in 2005 Russia and Belarus resumed negotiatrions to set up a joint venture within Beltransgaz for managing the Belarusian gas transmission network. This move will foster the network’s substantial development and will help enhance the reliability of Russian gas exports to Europe across Belarus.

Thus, all the prices fixed are economically underpinned. Gazprom’s policy for Belarus is beneficial for all of the company shareholders including representatives of the state and foreign investors,” said Alexander Ryazanov.


On 30 December 2004, Gazprom and Beltransgaz entered into a Gas Sales and Transit Contract over 2005. In pursuance of the Contract, Gazprom will provide Belarus with 19.1 bcm of gas worth of $46.68 per 1,000 m?, with additional supplies up to 1.4 bcm to be effected to the Republic provided there is sufficient gas transmission capacity available. As a result, a total of 20.15 bcm is expected to reach Belarus until the year-end of 2005.

Over 2005 Belarus is scheduled to transit 40.4 bcm of Russian gas, including 21.7 bcm by the Yamal-Europe gas pipeline. The tariffs for gas transmission by the Beltransgaz-owned networks and Gazprom’s Yamal-Europe pipeline will account for $0.75 and $0.46 per 1,000 m?, respectively.

On 5 December 2003, Gazprom and Beltransgaz sealed an Agreement to restructure Belarus gas debt to Russia for gas supply in 1999, 2001 and 2002. Said arrears are cleared in strict compliance with the schedule.

The Northern Tyumen Region (NTR) – Torzhok and Yamal-Europe gas pipelines are scheduled to link northern Tyumen’s fields with West Europe and their total length will be in excess of 4,000 km.

Yamal-Europe’s Belarusian section is 575-km-long, with the pipeline transmission part and the Nesvizhskaya, Krupskaya and Slonimskaya compressor stations already operational. To bring Yamal-Europe to its nominal capacity, another two compressor stations Orshanskaya and Minskaya are projected to be commissioned soon.




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