Dmitry Medvedev instructed Gazprom CEO Alexei Miller to limit gas deliveries to Belarus as from June 21, and to continue talks on settling the debts for earlier deliveries of Russian gas.

Mr Miller briefed the President on Gazprom’s talks with its counterparts in Belarus on settling debts for Russian gas supplies delivered between January and April 2010.

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PRESIDENT OF RUSSIA DMITRY MEDVEDEV: Mr Miller, I asked you to sort out the situation with Belarus’ gas debts. What are the results?

CHAIRMAN OF THE MANAGEMENT COUNCIL OF GAZPROM ALEXEI MILLER: We have held talks with our Belarusian colleagues. Belarus recognises its debts for Russian gas supplies, but proposes making payment in kind – with vehicles, equipment and other surrogates. The talks have thus failed to produce results so far.

DMITRY MEDVEDEV: Payment must be made in accordance with the terms of the contract, and the terms stipulate payment in foreign currency. To act otherwise would be in breach of our currency laws. Gazprom cannot accept anything other than what the contract states. We cannot accept any other form of payment - not pies, butter, cheese or pancakes – and our Belarusian partners need to understand this. Of course you must continue talks with them, but some decisions will have to be taken it seems. What does Gazprom propose doing?

ALEXEI MILLER: In accordance with the contract we will be forced to start limiting gas supplies in proportion to the size of the debt.

DMITRY MEDVEDEV: When will this happen? As I understand it, this will start very soon?

ALEXEI MILLER: Yes, we are forced to start limiting supplies as from 10:00 this morning.

DMITRY MEDVEDEV: Very well. Set about going through the necessary procedures in that case. But keep communicating with our Belarusian partners too, and encourage them to start fulfilling their side of the contract.

In accordance with Gazprom’s rules regarding communication with other counteragents within the European cooperation framework, you will need to inform them of the decisions Gazprom has taken. You will need to do this and to get in contact with all counterparts in any way involved with these supplies.

And as I said, consultations with the Belarusians must continue. Every effort should be made to ensure that this contract is carried out in accordance with the terms to which we all agreed.

ALEXEI MILLER: The restrictions will be introduced gradually, with daily supplies ultimately cut back to an amount in proportion with the size of the debt.

DMITRY MEDVEDEV: Act in accordance with the contract. Act with a partner’s understanding of the problems that have come up, while at the same time, standing up for Gazprom’s interests and, ultimately, the interests of our own consumers and country.

ALEXEI MILLER: Ii will be done.

DMITRY MEDVEDEV: We are agreed then.

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