New terms of gas supplies from Russia could prompt more Eurobonds issues by Belarus in 2017

Gazprom has announced an increase in the natural gas price for Belarus from USD 132 in 2016 to USD 141.1 per 1,000 cubic metres as of January 1^st, 2017. The price of gas is tied to the cost of gas in the Russian Yamal-Nenets Autonomous District, 70% of the gas price make transportation and storage. Negotiations about Belarus’ overdue debt for the gas supply from Russia are likely to continue; electricity tariffs for private and legal persons are likely to go up, while largest industrial enterprises are likely to increase non-payment for energy resources; and financial health at some chemical and metallurgical enterprises is likely to deteriorate. On average, Belarus consumes 19-22 billion cubic metres of natural gas per year, so an increase in the gas price will require additional currency resources circa USD 170 million, which could prompt Belarus to issue Eurobonds for this amount in 2017.