Aleksei Miller, the chief executive officer of Russia’s state-owned gas giant Gazprom, and Belarusian Ambassador to Russia Vladimir Semashko signed the deal shortly before the existing contract expired at midnight on New Year’s Day, the Moscow-based company said in a statement.
The two countries also agreed to maintain the amount of gas shipped to Belarus, including for further transit to Europe, at the same level next year as in 2019.
Belarus, whose outdated economy is propped up on cheap Russian energy, was seeking a cut in gas prices for 2020, while the Kremlin was pushing for an increase.
Russia’s stance has been that it would be a “mistake” to cut gas prices for Belarus before a union deal was reached, Interfax reported.
The Kremlin is seeking to slowly raise energy prices for its smaller neighbor toward global levels, a move the could potentially devastate its industry.
Some analysts say Russia has been using the threat of high energy prices as leverage to pressure Belarus to complete a 20-year-old agreement to form a union state.
Russian President Vladimir Putin and Belarusian President Alyaksandr Lukashenka have held several meetings this year to discuss the union process.
However, Lukashenka, who has been in power for 25 years, has sought to maintain his nation’s independence in part by making overtones to the West.
Belarus’s Defense Ministry said earlier in the day that it was in talks about holding peacekeeping exercises with forces from NATO-member Italy.
Belarus will be sending peacekeepers as part of an Italian contingent to the UN mission in Lebanon.
U.S. Secretary of State Mike Pompeo will meet Lukashenka in Minsk on January 4 to reiterate Washington’s commitment to a “sovereign and independent” Belarus.
It will be the first visit by a U.S. secretary of state to Belarus in a quarter-century and comes as the two countries are set to exchange ambassadors once again.
A senior State Department official said on December 30 that Pompeo’s visit to Minsk “will mark a historic and positive juncture” in bilateral relations.