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. Last Updated: 07/27/2016

Russia Reconnects Estonia's Gas Supply

The Russian state gas monopoly, Gazprom, has resumed normal gas deliveries to Estonia after the Baltic state agreed to pay $7 million in outstanding gas bills.


The late Tuesday move was a further sign that a bitter dispute between Moscow and Tallinn over a new Estonian Law on Aliens may be easing.


The Russian government had accused Estonia of "apartheid" over the law, until President Lennart Meri agreed Monday to delay ratification until it receives international approval.


Latvia and Lithuania, which also lost their gas supplies over the weekend, have not yet had their supplies restored to normal levels. According to Gazprom officials, they still owe Gazprom about 60 billion rubles, or $57 million, in outstanding gas debts.


Speaking at a press conference Wednesday, the chairman of the Estonian parliament, Vello Saatpalu, said that the gas had been restored after Estonia scheduled the debt repayment. Arne Saar, the head of the Estonian gas company Eesti Gaas, said half the money will be paid back by July 10, and the rest by Aug. 1.


The Prime Minister of Lithuania, Adolfas Slezevicius, described the cessation of the gas supply as "unpleasant but not unexpected", Baltfax reported. The Lithuanian government is reportedly planning to repay part of its $43 million debt to Gazprom with a $15 million World Bank credit. Slezevicius said the consumer price of gas will also have to be raised to repay the debt.


Estonia's gas supply was cut off by Gazprom last Friday, four days after the Estonian parliament passed the controversial Law on Aliens. The law calls for Estonia's 602, 000 non-Estonian residents to apply for Estonian residence permits or citizenship within two years, or else leave the country.


Although Saatpalu attributed the resumption of gas supplies to financial reasons, he said it was "very strange" that Russia insisted on the repayment of $7 million when $80 million of Estonian funds are frozen in Vneshekonombank, the Russian state bank that froze all assets in 1991.