Prime Minister Vladimir Putin arrives in Novokuznetsk for a working visit and holds a meeting to discuss the situation with natural gas exports to Belarus and other energy issues
Transcript of the beginning of the meeting:
Vladimir Putin: Good afternoon, ladies and gentlemen. Today we will discuss, among other things, coal power, electricity and energy in general. Let's start with natural gas exports to Belarus. Mr Miller, I understand the situation has changed somewhat. Please.
Alexei Miller: Mr Putin, this morning the Belarusians paid the money they owe for Russian natural gas, thus settling the debt that has been accumulating since the beginning of 2010. I have reported this development to President Dmitry Medvedev. As of 10 a.m. Moscow time, Gazprom has resumed the supply of gas to Belarus in full volume, although the issue has not yet been fully resolved. The issue is that we received a letter from the first deputy prime minister of Belarus in which he demands payment for the transit of Russian gas through Belarus on terms that are not in agreement with the current contract. The Belarusians threaten to halt the transit of gas through Belarus if the demands in the letter are not met.
Vladimir Putin: As I understand it, yesterday our Belarusian partners dipped into the export pipeline and siphoned off some gas. How much?
Alexei Miller: Yes, Mr Putin, we recorded shortfalls in exported Russian natural gas in three countries that receive gas through Belarus. Shortfalls due to Belarus siphoning off gas from the export pipeline reached 20% of the scheduled supply volume. We saw the same situation this morning before Russian gas exports [to Belarus] were resumed.
Vladimir Putin: This is a very unfortunate situation, because this conflict is with a republic, with a country with which Russia has special relations. And I would like to say that our Belarusian partners are getting Russian gas at rock-bottom prices. No other consumer pays less for Russian natural gas - no one. Even after lowering prices for Ukraine by $100, Ukrainian consumers still pay $234 per thousand cubic metres for natural gas, while Belarus pays $184. The difference - $50 - is substantial. Moreover, Russia does not impose export duties or customs charges on gas supplied to Belarus, which translates into a $1.2 billion loss for the Russian federal budget each year.
We have repeatedly warned our Belarusian partners of the need to pay for the products we provide in a timely manner. Gazprom has sent written notification three times and has received no clear answer on any of these occasions. Both President Medvedev and I have had to remind our Belarusian partners several times of the need to fulfil their obligations. No response. We regret that the matter has devolved into a conflict. We hope that nothing of the kind will ever happen again.
Moreover, I agree with you that both sides must fulfil their contractual obligations for gas prices and transit rates. Therefore, transit payments must be made in accordance with the contract.
We need to hold negotiations with our Belarusian partners, and clarify all of the disputed issues - if there even is some kind of dispute - in a normal, amicable manner, in a businesslike manner, at the negotiating table.
We signed the current contract in 2006. It is still in effect, and we need to work in accordance with it. If we want to change these terms, this needs to happen through the negotiation process. Act accordingly.
Alexei Miller: Yes, sir.
Vladimir Putin: Now let's discuss some other energy issues. There are some issues related to electricity supplies to Kaliningrad through Belarus. There are also some other problems. Mr Sechin, you've been in contact with your counterpart, haven't you?
Igor Sechin: Yes, Mr Putin, we have brought this up several times with the Belarusian government, government agencies, the ministry of energy, Belarusian Energy Minister Alexander Ozerets and my counterpart, Vladimir Semashko. We have insisted on connecting a Belarusian substation to supply electricity from Russia to Kaliningrad. The line has been down for almost six months, and we have not been able to supply electricity, despite all of the times we have discussed this and all the promises from Belarusian Prime Minister Sergei Sidorsky. Unfortunately, the fact that the Belarusians are siphoning off gas reduces gas transit volumes, including gas bound for the Kaliningrad Generating Station 2, which is an additional problem for electricity generation in Kaliningrad. We will keep this situation in mind, and in case these inappropriate actions continue we will reserve petroleum products as reserve fuel to ensure that this generating station continues to operate without interruption.
Vladimir Putin: Please tell me about the volumes and supply schedule for the generating and storage facilities involved.
Igor Sechin: Yes, sir.