Russia: EU 'completely wrong' to rely on gas says Timmermans
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Russia’s state-owned gas giant Gazprom has torn up its contracts with suppliers in Germany, Denmark and the Netherlands. It comes after the Russian President responded to Western sanctions by telling “unfriendly countries” that they needed to pay for Russian gas in rubles by March 31 or else face a supply cut.
He made clear that European nations should open up ruble accounts in Russian banks or Moscow would terminate its gas contracts.
Now, it appears Russia has done just that, with Gazprom reporting on Tuesday that it had completely cut supplies to Dutch gas trader GasTerra.
The gas giant later Denmark’s Orsted and Shell Energy in Germany would be cut off from June 1.
This comes after the EU warned that submitting to Putin’s request would undermine sanctions.
European Commission President Ursula von der Leyen said last month: “Our guidance here is very clear.
“If this is not foreseen in the contract, to pay in rubles is a breach of our sanctions.”
And it appears Dutch and Danish suppliers listened to Ms von der Leyen and prepared for the eventual supply cut from Putin.
GasTerra, which buys and trades gas for the Dutch state, said it already arranged for the two billion cubic metres (bcm) that should have been delivered by Gazprom to come from elsewhere.
Economy Affairs Ministry spokesperson Pieter ten Bruggencate said: “This is not yet seen as a threat to supplies.”
Orsted has also assured that Denmark is not at an immediate risk from the supply cut.
Orsted Chief Executive Mads Nipper said in a statement: “The gas for Denmark must, to a larger extent, be purchased on the European gas market.
“We expect this to be possible.”
Gas flowing through the Nord Stream pipeline into Germany also dropped in volume, despite several German companies appearing more willing to submit to Putin’s ruble request.
Analysts have argued that this is a consequence on the Netherlands being cut off.
In its ruble demand, Russia insisted that companies accept a new transaction scheme that would involve opening two accounts at Gazprombank, one in euros or dollars and another in rubles.
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But under new EU plans for gas payments, companies have to make a clear statement that they consider their obligations fulfilled once they pay in euros or dollars, in line with existing contracts, according to Bloomberg.
The Commission has also reassured governments that the sanctions will not prevent European companies from opening an account at Gazprombank and purchase Russian gas.
GasTerra has said that complying with Russia’s payment mechanism could undermine EU sanctions and pose “too many financial and operational risks”.
But German, Italian and French companies have said they are willing to comply with Putin’s demand to avoid a supply cut.
This also comes after Poland and Bulgaria’s supplies were cut off in April, also for refusing to cave to the Kremlin’s request.
Piotr Naimski, Warsaw’s Commissioner for Strategic Energy Infrastructure said Poland would never cave to Putin’s pressure and was prepared for retaliation.
He said: “We will not pay.
“Various possibilities and risks are being considered and we’re prepared for them.
“If it is necessary, and if such a decision is made, we’re able to cut ourselves off from the gas supplies at a moment’s notice, and we’re ready for Russian actions, including an interruption in supplies.”
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