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A dispute between Russia and Belarus over the price of natural gas is threatening energy supplies to Europe. Moscow is warning it will turn off the pipelines to Belarus if the two sides fail to reach an agreement by New Year's Day. As NPR's Gregory Feifer reports from Moscow, that could hit Russia's customers farther west.

GREGORY FEIFER: The clock is ticking with three days to go and both sides standing firm. Russia says it's finally ending a huge Soviet-era gas subsidy to its neighbor Belarus. But the Belarusians are refusing to sign a deal that would more than double the current price they pay for Russia gas.

Alexey Miller, head of the Russian state natural gas monopoly Gazprom says that leaves his company no alternative.

Mr. ALEXEY MILLER (President, Gazprom): (Through translator) If no deal is reached, Gazprom will have no basis to continue supplying gas to Belarus as of 10:00 in the morning on January 1, 2007.

FEIFER: Negotiations Wednesday ended in failure. Gazprom said it was willing to compromise in return for a 50 percent stake in Belarus' gas pipeline system. But spokesman Sergei Kupriyanov said there was no room for further concessions.

Mr. SERGEI KUPRIYANOV (Spokesman, Gazprom): (Russian spoken)

FEIFER: It isn't wise to expect any New Year's presence from Gazprom, he said. Gazprom isn't Santa Claus.

Moscow provides Europe with a third of its gas. The standoff with Belarus could affect European consumers because a quarter of their supply from Russia passes through Belarusian pipelines. Minsk threatened to stop those deliveries if Moscow turns off its taps to Belarus.

Gazprom says that's attempted blackmail but says it has ways of limiting supply disruptions to its European customers. The dispute has brought back memories of a similar confrontation a year ago between Russia and Ukraine. Moscow's temporary gas shutdown then did disrupt supplies to Europe, seriously tarnishing Russia's image as a reliable energy provider.

But Gazprom export chief Alexander Medvedev dismisses accusations that a shutoff to Belarus to deal Russia's reputation another blow.

Mr. ALEXANDER MEDVEDEV (Export Chief, Gazprom): We're not in the fashion business. We're in the gas business and sometimes the image does not coincide with the (unintelligible). And Gazprom is doing all the necessary things in order to security of supply will be provided for many years ahead.

FEIFER: Last winter the Ukrainian authority said Moscow was using energy supplies as a political weapon to punish its pro-Western former subject state. But Belarus is one of Russia's closest allies. Moscow and Minsk have even formerly agreed to form a unified state.

Analysts say the current gas dispute is part of a larger political standoff. Boris McCarkin(ph) of the Center for Political Technologies says Belarus' autocratic president, Alexander Lukashenko, wants cheap gas and other benefits from Russia but is unwilling to relinquish any control over his country's sovereignty.

Mr. BORIS MCCARKIN (Center for Political Technologies): (Through translator) So Russia says, if you're refusing to implement our plans for integration, we'll treat you like we treat other countries. We'll stop supporting your economy with our energy subsidies.

FEIFER: Russian economists say another reason Russia is raising gas prices for Belarus and other former Soviet neighbors is that it's worried about its gas reserves. Moscow hopes raising prices to its former Soviet customers will encourage them to reduce demands.

Gregory Feifer, NPR News, Moscow.

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