Belarus fertilizer firm could shut as Russia cuts gas supply

22 June 2010 10:02  [Source: ICIS news]

MOSCOW (ICIS news)--Belarusian fertilizer producer Grodno Azot warned on Tuesday that it could be forced to shut down following natural gas supply cuts from Russia.

It would take at least six days to re-start the facility following a shutdown, the company said.

State-owned Grodno Azot currently has the capacity to produce some 700,000 tonnes/year of mineral fertilizers. It exports about 40% of its output.

Russian state-controlled gas monopoly Gazprom started cutting gas supplies to Belarus this week due to an unpaid debt.

On 21 June, Gazprom said it had cut gas supplies to Belarus by 15%. It cut supplies by a further 15% on Tuesday and indicated that it could cut deliveries by a total of 85% eventually.

The two countries currently disagree on export duties levied by Russia on oil and oil products supplied to Belarus. Subsequently, Belarus has been importing crude oil from Venezuela.

Russia has a history of disputes with its oil and gas transit partners, Belarus and Ukraine. In January 2007 and in January 2010, Russia briefly halted crude oil supplies to Europe via Belarus following financial disputes. In January 2009, Russia cut off gas supplies to Ukraine.

In January-April 2010, Grodno Azot produced 250,000 tonnes of mineral fertilizers, which was up 3.9% year on year, and 361,000 tonnes of ammonia, which was up 3.6%, according to the company.

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By: Sergei Blagov
+44 20 8652 3214

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