MOSCOW, Dec 26: The latest negotiations between Belarus and Russia’s gas giant Gazprom on a steep price increase ended in failure on Tuesday, Gazprom said, as the clock ticked down on a New Year deadline for Belarus to accept the hike.

“Unfortunately, negotiations in fact ended without a result,” Gazprom spokesman Sergei Kupriyanov said on a television channel.

Gazprom’s contract with Belarus expires December 31 and the Russian monopoly, which controls the world’s biggest natural gas reserves, has indicated it will halt deliveries to Belarus if the ex-Soviet republic does not agree to a more than doubling in price.

Alexander Medvedev, head of Gazprom’s export branch, issued the same warning on Tuesday, while reassuring European clients who rely on gas that transits through Belarus they would not be affected.

“All the volumes will be delivered to other countries, even if Belarus does not have gas after January 1,” Medvedev told journalists.

Western European clients relying on Belarus for transit of gas are anxious not to be hit by the row, which resembles a crisis between Gazprom and Ukraine at the start of 2006 in which supplies were temporarily cut to Ukraine, with a knock-on effect through the European Union.

About 80 per cent of the Russian gas piped to Europe transits through Ukraine and about 20 per cent through Belarus.

A Belarussian energy ministry official said he still hoped for an accord.

He described threats by Gazprom that Belarus could face a cut-off as “rather brusque.”

Equally tense negotiations have been held for months between Gazprom and Georgia, another ex-Soviet republic that relies heavily on Russian energy supplies.

Last week Gazprom indicated that Georgia had decided to reject Russian gas supplies. However, only hours later, the two sides announced having come to a deal.

Gazprom is likewise embroiled in tough negotiations with Azerbaijan over a demand for another steep increase.

Currently, Belarus pays Gazprom $46.68 per 1,000 cubic metres of gas.

Gazprom has said it wants to charge around $200, unless Belarus agrees to sell 50 per cent of its pipeline operator Beltransgaz, giving the Russian state-owned giant an important strategic foothold on the European Union's eastern border.

On Tuesday, Gazprom said it was prepared to scale back and charge only $110 per 1,000 cubic metres. Later, Medvedev said the price would amount to $105.

This would consist of $75 per 1,000 cubic metres in cash payments and the equivalent of another $30 in shares of Beltransgas, he said.

“We have exhausted all possibilities for improving our offer,” he told journalists. “Those turning down such an offer, in my opinion, are either people who do not understand its meaning, or on purpose are pushing for negotiations to collapse.”

Gazprom says that Belarus is offering to pay about $40 per 1,000 cubic metres of gas for consumption by the public, and $54 for use by industry -- in line with the prices for customers in the Russian region of Smolensk, which borders Belarus.

Russia and Belarus have formed an economic union under which many economic barriers have been lifted and travel eased, although more ambitious political goals have been shelved.—AFP