The essentials The Russian company Gazprom has announced that it will stop all gas supplies for Poland and Bulgaria. The company wants European Union countries to pay their bills in rubles.
The valves are closed. The Russian company Gazprom announced on Wednesday April 27th that it would not supply gas to Poland or Bulgaria. Russia is making good on its threats: in fact, the Kremlin had warned the countries of the European Union to stop all gas exports if the bill was not paid in rubles. The companies Bulgargaz (based in Bulgaria) and PGNiG received a notification from Gazprom informing them about the “suspension of gas supplies from April 27 and pending payment”.
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A hard blow, especially for Poland, which is almost 60 percent dependent on Russian gas: “Poland consumes around 20 billion cubic meters of gas a year: that’s half of what France consumes,” says Philippe Charlez, an expert on energy issues at the institute Sapiens, with La Dépeche du Midi. She uses that gas mostly for heating: if the Russians shut off the gas until next winter, I don’t know how they’ll get out.”
Refuse the ruble
The main problem is the need to pay the bill in rubles. “Around 97% of contracts (between EU companies and Russian gas suppliers) provide for payments in euros or dollars […] Companies with such contracts should not give in to Russia’s demand that they violate the sanctions “imposed by the countries of the European Union after the Russian invasion of Ukraine,” Ursula von der Leyen, President of the European Union, warned on Wednesday Commission.
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The ultimatum was issued by Vladimir Putin at the end of March. However, the Russian decree authorized importing countries to open an account with the Russian bank Gazprombank and deposit their payments there in dollars or euros. A way for Russia to restore the value of the national currency by circumventing sanctions. “Within the European Union, only Hungary has agreed to pay for imported Russian gas in rubles,” Thierry Bros, a professor at Sciences Po and an energy expert, told La Dépêche du Midi. Both France and Germany, for example, reject such a system. “There may be a situation where tomorrow […] there will be no more Russian gas,” said Economics Minister Bruno Le Maire a few weeks ago.
France is not worried
If Russia closed the floodgates tomorrow, would France be worried? Not that much, experts say. “France consumes 40 billion cubic meters of gas per year and is 17% dependent on Russian gas,” summarizes Philippe Charlez. France can rely on gas imports from Norway (leading importer), at its four terminals with LNG carriers and on its own gas reserves. If we save a bit nationally, we can get away with it.”
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The consequences of closing the locks could be much more serious on a European scale: most of the Twenty-Seven are particularly dependent on it. “This is the case in Germany, 50% of imported gas comes from Russia,” recalls Thierry Bros. In its blackmail, the Kremlin lets the geography of its gas pipelines do the talking: in any case, it can decide to deliver gas only to certain regions of the EU, as the map below shows.
“Russia just shut down the Yamal, its pipeline that runs through Belarus. There is still the Nordstrom (which runs under the Baltic Sea) and the Brotherhood” that runs through Ukraine, describes Philippe Charlez. “If Putin were to close these pipelines, it would be catastrophic,” the expert comments.