Europe dodges a gas crisis
Europe can’t decide how to pay for Russian imports of natural gas that continue to fuel homes, businesses and power plants.
The confusion relates to the logistics of the payments themselves. Several European gas buyers are preparing to circumvent the Kremlin’s demand that gas bills be paid in rubles, rather than the euros or dollars stipulated in the contracts.
According to Russia’s new payment mechanism, buyers from “unfriendly” countries must open two accounts at Gazprombank – one in euros and the second in rubles, from which payments for gas would be made.
But on Tuesday, the European Commission said companies opening an account with Russia’s Gazprombank to allow their payments to be converted into rubles would fall under EU sanctions.
The statement appeared to contradict guidance the Commission had given four days earlier, leading some of Europe’s biggest energy companies to speculate that they could circumvent the currency problem by opening two accounts with the Russian bank.
It comes as several major European companies attempt to pay their bills on time without violating sanctions.
“Anything beyond opening an account in the contract currency with Gazprombank and paying into that account, then issuing a statement that… you have finalized the payment, breached sanctions,” said Eric Mamer, the commission’s chief spokesman. , said during a press briefing.
Russian energy giant Gazprom cut off gas supplies to two EU countries – Poland and Bulgaria – in late April, following a decree by President Vladimir Putin in March that threatened to suspend deliveries to “unfriendly” countries that did not pay for their gas in roubles. European leaders called Moscow’s decision “blackmail”.
Since then, European gas distributors, national governments and EU officials have scrambled to avoid a wider supply disruption, while maintaining sanctions imposed on Moscow following the invasion of the Ukraine.
Last month, the European Commission said it “appears[ed] possible” for the new payment mechanism to work. On Friday he said that as long as buyers pay in euros and dollars and clearly state that they have done so, they will not be in breach of EU sanctions.
“[Buyer’s should] consider their contractual obligations regarding payment already fulfilled by paying in euros or dollars,” the commission said in a guidance note to EU member states, and shared with CNN Business.
Friday’s forecast prompted some of Europe’s major energy companies to put in place new arrangements, with payment delays looming this month.
Italy’s ENI announced on Tuesday that it has started the process of opening two accounts with Gazprombank, one in euros and the other in roubles. She said that once her deposits were made in euros, an agent at the Moscow Stock Exchange would convert the funds into rubles within 48 hours.
The company said in a press release that the new process was “not incompatible with existing sanctions” and would not, for the time being, face any European regulations to try to stop it.
German energy company RWE (RWEOY) told CNN Business on Tuesday that it had opened a new bank account to pay for its imports of Russian gas, but did not specify from which bank.
“We are ready for payment in euros and have opened a corresponding account,” a company spokesperson said. “We are therefore acting in accordance with European and German regulations.”
French Engie (ENGIY) also said on Tuesday that it had found a compromise with Gazprom. Russian gas accounts for around 20% of the company’s global gas consumption.
“We now have our sights set on a solution that will allow us to pay using the contract currency, which appears to be acceptable to Gazprom and is EU sanctions compliant at least to our knowledge,” he said. said CEO Catherine MacGregor. reporters on a call.
MacGregor said the next gas payments from Engie were imminent, but did not say whether he had opened or intended to open an account with Gazprombank.
German gas distributor Uniper said last month that it would continue to pay for its Russian supplies in euros, but added that it believed a “sanctions law-compliant payment conversion” was possible.
However, not everyone agrees.
Finland’s state-owned gas company Gasum said on Tuesday it “did not accept” Gazprom’s payment terms and was preparing to halt its gas deliveries from Russia.
Europe has offered to reduce its consumption of Russian gas by 66% by the end of this year. He is expected to release a more detailed plan later this month.
— Robert North contributed reporting.