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    NewsRussiaRussia to cut gas supplies to companies in Germany and Denmark

    Russia to cut gas supplies to companies in Germany and Denmark

    The list of European countries to which Russia is cutting gas supplies continues to grow.

    The Russian state company Gazprom announced this Tuesday that it will stop, as of June 1, the shipments of this fuel to Shell Energy, for supplies in Germany; and to Orsted, in Denmark, due to their refusal to make payments in rubles, as required by Moscow.

    A similar measure and for the same reasons began to be applied this May 31 to the GasTerra company in the Netherlands.

    The Danish company Orsted, which had already warned that it could suffer a supply cut by Moscow, announced Tuesday that it will try to fill the gap by turning to the European energy market.

    “Gas in Denmark must, to a large extent, be purchased on the European gas market. We hope this will be possible,” Mads Nipper, Orsted’s chief executive officer, said in a statement.

    The Danish company stressed that Moscow’s decision will not immediately jeopardize gas supplies in Denmark.

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    A letter sent to Parliament by Danish Energy Minister Dan Jorgensen notes that Denmark’s gas deposits are currently at 55% of their capacity, which would cover the needs of all customers in Denmark and Sweden for five months.

    In the case of Germany, Gazprom said it had been notified of Shell Energy’s refusal to pay in rubles for gas shipped to Germany and stressed that the contract between the two companies provides for the supply of up to 1.2 billion cubic meters per year.

    However, cutting off shipments to Shell Energy will not mean the suspension of all Russian gas supplies to Germany.

    Uniper and RWE, two of the leading German energy companies, agreed to pay for shipments of the fuel using the mechanism designed by Moscow and which allows payments to be made in euros that are then converted to rubles.

    “Like other German and European companies, Uniper has changed the method of payment for gas deliveries from Russia. Uniper pays in euros in accordance with the new payment mechanism,” the company said in response to a query by Reuters.

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    Cut to the Netherlands

    As of this May 31, the Netherlands joined the group of European states to which Moscow suspended gas supplies following the outbreak of the war in Ukraine.

    Both the energy company GasTerra, in which the Dutch state has a 50% shareholding, and the Russian state gas company Gazprom, had warned about the cut-off on Monday.

    GasTerra, which buys and markets gas on behalf of the Netherlands, reported that it had contracted with other suppliers to purchase the 2 billion cubic meters of gas it initially expected to receive from Gazprom until October this year.

    “We understand GasTerra’s decision not to accept the payment terms unilaterally imposed by Gazprom. This decision will have no material consequences on the supply of gas to Dutch households,” Dutch Energy Minister Rob Jetten wrote on Twitter.

    Since the invasion of Ukraine in February, Russian President Vladimir Putin decided to demand that “unfriendly foreign countries” pay rubles for gas sold to them by Moscow under threat of having their supplies cut off.

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    In the case of the Netherlands, GasTerra said it had decided not to adopt the mechanism demanded by Moscow, which involved setting up accounts that would be paid in euros and then exchanged into rubles.

    The company warned that such an operation could violate European Union sanctions against Russia and that, in addition, the payment scheme involved many financial and operational risks.

    Gazprom, for its part, assured that the suspension of gas supplies will be maintained until the payments do not meet the parameters demanded by Moscow.

    Last April, Gazprom suspended gas supplies to Poland, Bulgaria and Finland for the same reasons.

    Payments in rubles benefit the Russian economy and would shore up its currency in an adverse economic context due to the international sanctions against it, which continue to increase.

    Richard Ferdinand
    Richard Ferdinand
    Richard Ferdinand is an aspiring Journalist, Explorer, Adventure Loving and Blogger. You can contact him via [email protected]

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