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Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

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German Energy Giant To Pay For Russian Gas In Rubles

  • Uniper set to pay for Russian gas imports in Rubles.
  • Uniper's move comes despite calls from the European Commission to EU energy buyers to not pay for Russian gas in rubles.
Gas

Germany's power utility Uniper—one of Germany's largest gas importers—will pay for Russian gas deliveries in rubles in accordance with the new payment procedure announced by Russia last month.

"The plan is to make our payments in euros to an account in Russia," a company spokesperson told German media, as cited by Reuters.

Per the procedure, any buyer of Russian gas from any unfriendly country needs to open two accounts in Gazprombank: one in the foreign currency it wants to pay in and one in rubles.

When a gas payment is due, the buyer deposits the necessary sum in dollars or euros in its first Gazprombank account. The bank then converts the sum into rubles under Russian central bank exchange rates and deposits it in the second account, from which the actual payment is made.

Uniper said earlier this week it was prepared to begin paying in rubles for Russian gas, soon after Gazprom informed Poland and Bulgaria that it would suspend gas deliveries to them following their refusal to pay for the gas in rubles.

The Bulgarian state gas company said that it had found problems in the terms of the new procedure that put the security of gas deliveries in doubt. Uniper, on the other hand, does not seem to have such misgivings. It also does not share EU officials' concern about the switch to rubles possibly breaching sanctions.

"We consider that the amendment of the payment process complies with the sanctions law and so the payments are possible," said the chief financial officer of the energy company, Tiina Tuomela, this week.

Uniper's move comes despite calls from the European Commission to EU energy buyers to not pay for Russian gas in rubles.

"Companies with such contracts should not accede to the Russian demands," EC president von der Leyen said this week, as quoted by Al Jazeera. "This would be a breach of the sanctions so a high risk for the companies."

By Irina Slav for Oilprice.com

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  • Mamdouh Salameh on April 28 2022 said:
    With Germany's power giant Uniper—one of Germany's largest gas importers agreeing to pay for Russian gas deliveries in rubles, the first chink in the EU armour is starting to appear.

    Uniper's move comes despite calls from the EU Commission President Ursula von der Leyen to EU energy buyers to not pay for Russian gas in rubles.

    Other than Uniper, four other European buyers have already paid for Russian gas in rubles and ten companies in Europe have opened accounts at Gazprombank, which President Putin has designated as the bank that will be handling the payments in rubles for Russian gas.

    President Putin is getting his wish of getting rubles for his gas exports. This will soon apply to Russia's exports of oil, wheat, precious metals, food materials, industrial equipment and processed uranium.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

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