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Gas Supplies to Belarus May Be Reduced

Medvedev meeting with Miller on Wednesday at the presidential residence. Dmitry Astakhov

Gazprom said Wednesday that Belarus had until June 21 to pay off its gas debts or face limitations on supplies.

If Belarus doesn't settle its $200 million payment arrears in time, "Gazprom will be forced to exercise its rights on limiting gas supplies to Belarus, according to the contract," Gazprom spokesman Sergei Kupriyanov said.

The announcement comes after a meeting Tuesday evening between President Dmitry Medvedev and Gazprom CEO Alexei Miller, in which the president issued an ultimatum to Belarus.

If the debt isn't paid off, "stern measures will have to be taken," Medvedev said.

Belarus has contested a price hike on Russian gas supplies implemented at the beginning of the year. Since the beginning of the year, Belarus has continued paying for gas at last year's price, $150 per thousand cubic meters, rather than the current contract price of $174.

While the terms of the contract allow for Gazprom to gradually raise prices, the Belarussian side says the contract requires its gas prices to stay equal to Russian domestic prices, excluding tariffs and transport costs.

Minsk gave no official response Wednesday, but a source in the Belarussian government told Interfax that talks needed to be continued on moving toward a more equal pricing regime.

According to the contract, Gazprom can cut gas supplies to the country proportionately to the country's debt load, Miller said at the meeting. He added that Belarus surely had the money to pay for the supplies, as Gazprom had just paid $625 million to the country for a stake in Beltransgaz, Belarus' gas pipeline operator.

Last month, Belarussian President Alexander Lukashenko said his country was willing to hand over full control of Beltransgaz to Gazprom if it would sell gas at Russian domestic prices.

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