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European gas buyers have at least 2 weeks to pay in roubles, says Kremlin

European importers of Russian natural gas have until at least the second half of April to comply with Moscow’s demand to pay in rubles, the Kremlin said, as buyers have difficulty understanding their commitments.

“Payment for the actual shipments now being made should not be made today,” Kremlin spokesman Dmitry Peskov said on Friday, a day after Russia issued an order on ruble payments.

“It has to be done somewhere… In the second half of April, or even in early May.”

His remarks allayed fears that Russia could immediately close supplies to any buyer who did not offer a ruble. But the long-term threat remains of halting Moscow shipments and starvation of parts of Europe from energy.

Many European buyers have so far refused to pay in rubles, saying that Russia’s demand violates the terms of their purchase contracts, most of which are denominated in euros or US dollars.

Russia has proposed a mechanism that would require gas buyers to open bank accounts both in foreign currency and in rubles at Gazprombank, which is not subject to EU sanctions, in order to buy rubles for use in payment. He said this would not violate contracts or change volume or pricing terms.

Russian President Vladimir Putin signed the ruble order on Thursday. It applies to “unfriendly” countries that have imposed sanctions on Russia for invading Ukraine, including EU members.

If no payments are made, he said, “it would appear to be a default on the part of the buyers – with all the consequences that entail.”

The threat of supply disruptions has sparked a warning among European countries that rely heavily on Russian gas, as Germany and Austria began preparations this week for energy rationing.

German Chancellor Olaf Schultz said on Thursday that he had told Putin that his country had checked its gas contracts with Russia and would continue to pay for them in euros and sometimes in dollars.

Putin described the proposed payment mechanism as a “clear and transparent plan” for foreign customers.

But Lauren Roskas, an energy analyst at S&P Global, said one of the concerns of European gas buyers was that the Russian central bank – which is in sanctions, as opposed to Gazprombank – would probably be the de facto opposite side of the ruble exchange.

“Opposition is likely to come from the political level,” he said, but added: “There is potential for a membership compliance problem.”

Gazprom, the country’s gas giant that supplies more than a third of Europe’s gas needs, said on Friday it had begun sending official messages to its customers about the new payment process.

“Gazprom, as a Russian company, is unconditional and meets the requirements of Russian legislation,” the statement said. “Notices of the new procedure for settlements in Russian rubles are being sent today officially to the opposing parties.” She added that she continued to “reliably export” gas.

OMV, an Austrian buyer of Russian gas, confirmed that state-owned Gazprom was in touch for the first time regarding a change in payment to the ruble, but said it was awaiting written information from its contractual partner.

Slovakia’s SPP, another major buyer of Russian gas, said: “None of our suppliers have contacted us in this matter. SPP will operate in accordance with the terms and conditions of the appropriate contracts. The current currency for gas supply is the Euro.”

European gas buyers have at least 2 weeks to pay in roubles, says Kremlin Source link European gas buyers have at least 2 weeks to pay in roubles, says Kremlin

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