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Russia and the West Conflict Over Gas Payments in the Ruble

The valve was shot at the Atamanskaya compressor station, which is part of Gazprom’s Power Of Siberia project outside the far eastern town of Svobodny in the Amur region of Russia in 2019. REUTERS / Maxim Shemetov.

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  • Russia decides gas payment mechanism by Thursday
  • EU countries are still at odds on how to pay in rubles
  • G7 countries refuse to pay Russian gas in rubles

March 28 (Reuters)-Russia said Monday that it would not supply Europe free of charge as it is considering ways to accept payments for gas exports in the ruble, but G7 countries have rejected demand.

At the European Union summit on Friday, after a series of cooperation between the US and European allies in response to Russia’s request last week, “unfriendly” countries must pay the gas in rubles instead of euros. The common position of having to do not emerge.Sanctions against Russia

Concerns about supply security increased after demand, and companies and EU countries struggled to understand the implications.

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The Central Bank of Russia, the government, and Gazprom (GAZP.MM), which accounts for 40% of European gas imports, must submit a proposal for payment of ruble gas to President Vladimir Putin by March 31.

“I’m not going to supply gas for free, which is clear,” Kremlin spokesman Dmitry Peskov said in a conference call.

When asked if he would stop the non-payers’ gas in an interview with PBS, a public broadcaster on Monday, Peskov replied, “No payment-no gas.”

But he added that Russia has not yet made a final decision on what to do if European countries refuse to pay in Russian currency.

Meanwhile, the Energy Minister of the Group of Seven’s industrialized nations refused to pay for rubble, Germany’s Minister of Economy and Climate Protection Robert Habeck said after a meeting with his counterparts.

“All G7 ministers agreed that this was a one-sided and clear breach of the existing contract,” he told reporters after a virtual meeting with the G7 energy minister.

Ministers reiterated that the contracts signed are valid and that companies should and must respect them. Payments in the ruble are unacceptable. Not to comply with Putin’s request. Call on companies. “

Energy security

Wholesale gas prices in the Netherlands and the UK rose by up to 20% on Monday due to concerns over Russia’s gas supply.

The EU aims to reduce Russia’s dependence on gas by two-thirds this year and end Russia’s fossil fuel imports by 2027. Russia’s gas exports to the EU were about 155 billion cubic meters (bcm) last year.

On Friday, the United States announced that it would work to supply the European Union with 15 bcm of liquefied natural gas (LNG) this year.read more

The US LNG plant is at full capacity, and analysts say most of the additional US gas sent to Europe must come from exports that would have gone elsewhere.

Russian lawmaker Ivan Abramov said a G7 refusal to pay for Russian gas in the ruble would lead to a clear outage of supply, according to a RIA news agency.

Abramov is a member of the Economic Policy Committee of the Federation Council, the Senate of the Russian Parliament.

Habeck of Germany called Russia an “unreliable energy supplier.”

When asked about what would happen if Russia shut down its gas supply, he added: “We are preparing for all scenarios, not just since yesterday.”

But experts say the EU will have a hard time replacing all of Russia’s gas exports in a short period of time.

Gas supplies to Europe on Russia’s three major pipeline routes were stable on Monday, and the Yamal-Europe pipeline continues to flow eastward from Germany to Poland, operator data show. ..

Russia’s Gazprom (GAZP.MM) said it continues to supply natural gas to Europe via Ukraine at the request of European consumers.

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Report by Reuters, written by Nina Chestney, edited by David Evans and Stephen Coates

Our Criteria: Thomson Reuters Trust Principles.

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