On working meeting between Alexey Miller and Vladimir Semashko
RELEASE
Release
Today the Gazprom Headquarters hosted a working meeting between Alexey Miller, Chairman of the Company’s Management Committee and Vladimir Semashko, First Deputy Prime Minister of the Republic of Belarus.
The meeting discussed the main issues of bilateral cooperation in the gas area. It was pointed out that the gas price for Belarus was calculated based on a contractual price formula linked to the value of oil products in Europe.
In the course of the negotiations the parties also addressed issues with regard to Beltransgaz’s current activities. Special emphasis was placed on the company’s fund allocations to the Belarusian Innovative Foundation. Gazprom draw the Belarusian partners’ attention to the fact that such allocations were in contradiction with the acquisition terms for a 50 per cent stake in Beltransgaz.
Alexey Miller and Vladimir Semashko decided to set up a joint working group for a power plant construction project in the Republic of Belarus.
Background
On December 31, 2006, Gazprom and Beltransgaz signed the Gas Supply & Transit Contract for 2007 through 2011. The Contract fixed the price of Russian gas for 2007 (USD 100 per 1,000 cu m) and the price formula starting from January 1, 2008 (which is in line with the price formula for Russian gas supply to Europe) as well as the discounts to the market price for 2008–2010 (0.67, 0.8 and 0.9 respectively). Starting from 2011, Belarus as well as Russia’s industrial consumers will have gas prices equally profitable versus prices of gas delivered to Europe.
The Contract also fixed a tariff rate for gas supply by the Beltransgaz owned networks and a service charge for the Yamal – Europe gas pipeline operation (calculated under a formula).
On December 31, 2006, Gazprom and the Government of the Republic of Belarus signed a Protocol, under which Gazprom would pay USD 2.5 bln in equal portions for a 50 per cent stake in Beltransgaz within four years.
In May 2007 Gazprom and the State Property Committee of the Republic of Belarus signed a Purchase and Sale Agreement for 50 per cent of the shares in Beltransgaz. At present, Gazprom holds a 25 per cent stake in the company.
The increase in Beltransgaz’s fund allocations to the Belarusian Innovative Foundation to 19 per cent from the prime cost of the services delivered by the company is repugnant to the existing documents.
Pursuant to the Protocol on the issues surrounding the creation of a joint gas transportation venture as of December 31, 2006 as well as the Agreement for the purchase and sale of Beltransgaz’s shares signed by Gazprom and the State Property Committee of the Republic of Belarus on May 18, 2007, the Belarusian side should not increase the financial liabilities of Beltransgaz.
In addition, pursuant to the Agreement between the Government of the Russian Federation and the Government of the Republic of Belarus on the actions aimed at developing the trade and economic cooperation dated March 2007, starting from July 1, 2007, the Belarusian side should not impose charges (in the form of taxes and duties) not provided for in the tax legislation of the Republic of Belarus on business entities with Russian equity.