European Gas Firms Seek Ways To Meet Putin’s Gas Payments Terms – – Daily Cryptocurrency and FX News

Gazprom Might Lose 30% Of Gas Exports To Europe In 2022

Germany’s and Austria’s energy suppliers confirm they are seeking sanctions-compliant methods

Following Vladimir Putin regime’s decision to cut off supplies to Bulgaria and Poland and insisting other countries must pay in roubles, European energy companies are considering opening Russian accounts to pay for gas from Gazprom.

Putin signed a decree at the end of March calling for a “special procedure for foreign buyers’ fulfillment of obligations to Russian suppliers of natural gas”. Big gas distributors in Austria and Germany confirmed they were looking for ways to continue making payments.

The decree specifies that non-Russian buyers of gas must open special “K” type rouble and foreign currency accounts at Gazprombank, the third-largest bank in Russia. Gazprom, the state-owned gas producer that has a monopoly on exports via gas pipelines to Europe, set up Gazprombank to be its service provider.

The Austria distributor OMV and German’s Uniper confirmed they were considering how to adhere to the decree. In hope of securing continued supplies, companies in Italy’s Eni, Slovakia, as well as Hungary were also considering signing up for the accounts despite the European Commission saying that doing so could breach sanctions, the Financial Times reported.

Refusing to sign up to Putin’s preferred arrangement, Bulgaria and Poland have taken a defiant position. Russia’s retaliatory suspension of gas supplies was described as a “direct attack” by Poland’s Prime Minister, Mateusz Morawiecki.

But amid fears – disputed by some analysts – that an embargo would be impossible without crashing its economy, Germany, the largest Russian gas user, and Europe’s largest economy, has adopted a more emollient tone.

On April 28, a spokesperson for Uniper, one of Germany’s main buyers of gas from Russia, confirmed it was in talks with Gazprom “in close coordination with the German government” over “concrete payment modalities”. However, it would continue to pay in euros for now. The spokesperson stated:

“Uniper can say for its contracts: we consider a payment conversion compliant with sanctions law and the Russian decree to be possible. For our company and Germany as a whole, it is not possible to do without Russian gas in the short term; this would have dramatic consequences for our economy.”

OMV, an Austrian oil and gas company, is also seeking ways to pay for gas without defying EU sanctions. In a statement, OMV said:

“We have analyzed the Gazprom request about payment methods in light of the EU sanctions and are now working on a sanctions-compliant solution.”

Ursula von der Leyen, the European Commission president, on April 27, said the Kremlin was using “fossil fuels to try to blackmail us”, and that the European Union was seeking to import more gas from the US to reduce its reliance on Russian gas. The EU has, however, made no attempts to impose sanctions on Gazprom or Gazprombank.

Uniper oil company

Citing a person close to Gazprom, four European companies have paid in roubles while another 10 have opened accounts, Bloomberg News reported on Wednesday.

Following the arrangement specified by Russia, the gas would be paid for in euros – the currency in which contracts were written – and those euros would be sold in the Moscow exchange for roubles, which would then be channeled to Gazprom.

Helping importers in Russia’s economy, which has been hit hard by the economic isolation caused by sanctions imposed by many other major countries and the war, the currency would be sustained with help from extra demand for roubles.

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