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. Last Updated: 07/27/2016

Russia Blowing Hot and Cold on Gas Cost Hikes

While Russia offered concessions Wednesday in its gas pricing standoff with Belarus and Moldova, which may soothe Europe's fears that it could again face reduced gas supplies in the middle of winter, it appeared determined to pursue its hard line with Georgia.

The Russian ambassador in Minsk, Alexander Surikov, said Moscow was ready to pay more for Belarussian gas pipelines and to continue to sell tax-free oil as part of a broader deal to secure stable gas sales at higher prices.

"Russia will cut the gas price for Belarus to $140 per 1,000 cubic meters from the earlier proposed $200 if a deal is reached with [state gas firm] Beltransgaz," Surikov told reporters.

Surikov said Russia agreed Beltransgaz might be worth from $3 billion to $4 billion, up from the $1 billion at which it had assessed its value earlier.

However, Belarus rejected Russian demands that it pay from $130 to $140 per 1,000 cubic meters for natural gas supplies, as the well as the estimate of the value of its pipelines. Belarus says Beltransgaz is worth $5 billion, said Belarus' Finance Minister Nikolai Korbut.

Belarus will pay less than $130, Interfax reported, citing Belarussian First Deputy Prime Minister Vladimir Semashko in Minsk on Wednesday.

Also on Wednesday, Moldova clinched a deal with Gazprom on a small increase in gas prices next year, Moldovan President Vladimir Voronin said.

Voronin said Moldova would pay $170 per 1,000 cubic meters of gas next year compared with $160 this year, adding that gradual increases were also possible in the future.

"The price will grow slowly, not sharply, every year. The price will grow within the next five years until it reaches the European level," Voronin told a news conference in the Moldovan capital, Chisinau.

Moldova, one of Europe's poorest countries, was hit hard this year when Russia doubled gas prices and banned Moldovan wine imports. Some analysts accused Russia of seeking to punish Voronin, who has announced his intention to move his country out of the Kremlin orbit.

Relations between Moscow and Chisinau have warmed up in the past months, and Voronin managed to agree on a partial restart of Moldovan wine imports during his recent visit to Russia.

Meanwhile, Gazprom on Wednesday set the price of natural gas exports to Georgia at $235 per 1,000 cubic meters, an increase on the current $110, and threatened to cut off supplies if that price was not accepted, officials said.

Gazprom spokesman Sergei Kupriyanov said the company had sent a letter to Georgian authorities asking them to come up with a final amount of gas they want to receive next year at the proposed price, or risk receiving no gas at all. Earlier this year, Gazprom was demanding $230 per 1,000 cubic meters.

(Reuters, Bloomberg, AP)