2 January 2007 - Russian gas company Gazprom hammered out an eleventh-hour deal on Sunday to supply natural gas to Belarus - thus narrowly avoiding a gas price war that threatened to disrupt European supplies.
The agreement, signed just two minutes to midnight on 31 December, averted a shutdown of gas supplies to Belarus that had been scheduled for 10am on 1 January. Under the terms of the five-year deal, Belarus is to pay $100 per 1 000 m3 of natural gas - double the previous price - while Gazprom agreed to pay $2.5bn in cash for a 50 per cent stake in the Beltrangaz pipeline network.
The new contract will see prices rise steadily over the next five years, bringing them in line with other European countries by 2011. However, the price increase and exemption from export duties give Belarus more favourable terms than other former Soviet republics.
Around 20 per cent of Russian gas is exported through Belarus, with recipients including Germany, Poland and Lithuania, which would have felt the repercussions had the tap been turned off. The new deal will also see Belarus double the tariffs for Russia's gas transits.