The Mallnow natural gas compressor station of Gascade Gastransport GmbH on April 27 in Brandenburg, Germany. The compressor station in Mallnow near the German-Polish border mainly uses Russian natural gas. (Patrick Pleul/Picture Alliance/Getty Images)
Some of Russia’s largest natural gas customers in Europe are preparing to accept the Kremlin’s new payment terms rather than risk being cut off from Moscow, a fate Poland and Bulgaria suffered this week.
Gas distributors in Germany and Austria told CNN Business they are working on ways to accept a Russian ultimatum that final payments on its gas be made in rubles while complying with EU sanctions.
Russian President Vladimir Putin said last month that “unfriendly” nations would have to pay in rubles instead of the euros or dollars stipulated in treaties. Buyers could make euro or dollar payments into an account with Russia’s Gazprombank, which would then convert the money into rubles and transfer it to a second account, from which the payment would be made to Russia.
Germany’s Uniper said on Thursday it would continue to pay for Russian gas in euros, but added that it believes a “sanctions law-compliant payment switch” is possible.
“Uniper is in talks with its contractual partner about the specific payment terms and also in close coordination with the federal government,” the company said in a statement.
A Uniper spokesman told the Rheinische Post on Thursday that the company would make payments in euros to a Russian bank instead of a bank based in Europe.
Germany has reduced its consumption of Russian gas to 35% of imports from 55% before the war in Ukraine, but says it must continue buying from Moscow at least until next year to avoid a deep recession.
Uniper said it could not do without Russian gas in the short term.
“This would have dramatic consequences for our economy,” it said in its statement.
Austrian energy company OMV (OMVJF) said on Thursday that they had checked the new payment request from the Russian gas giant Gazprom and were “now working on a sanctions-compliant solution”.
Putin on Wednesday made good on his threat to cut off countries that reject the new payment terms. Gazprom announced it had halted gas supplies to Bulgaria and Poland because they refused to pay in rubles, raising fears that other EU countries – including big gas importers Germany and Italy – could be next .
sanctions loophole? There might be a workaround. The European Commission last week issued guidelines for EU member states where it “appears possible” that buyers could comply with the new Russian rules without clashing with EU law.
EU governments are likely to allow the payment mechanism, Eurasia Group said in a statement on Thursday.
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