March 21, 2023

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Russia will cut off gas supplies to the Netherlands.  Denmark may be next.

Russia will cut off gas supplies to the Netherlands. Denmark may be next.

  • Gazprom is set to cut off natural gas supplies to the Netherlands as Dutch trader GasTerra refuses to pay in rubles.
  • This is after Russian President Putin demanded that payments for natural gas be paid in rubles.
  • Denmark’s Ørsted rejected the request and warned that its supplies from Gazprom could be cut.

Russian energy giant Gazprom plans to cut off natural gas supplies to the Netherlands on Tuesday, as Dutch trader Gastera refused to make payments in rubles.

In a decree issued on March 31, Russian President Vladimir Putin They demanded that payments for natural gas be made in rubles, which entails opening an account in euros and rubles with Gazprombank in Moscow to process payments.

GasTerra will not comply with Gazprom’s payment demands, said GasTerra, which is partly state-owned and trades on behalf of the government.

“This is because doing so may risk breaching EU sanctions and also because there are numerous financial and operational risks associated with the required payment path,” the Dutch company wrote. In a press release on Monday. “In particular, opening accounts in Moscow under Russian law and being controlled by the Russian regime poses a great risk.”

In response, Gazprom announced that it will halt supplies of natural gas, Go GasTerra, from Tuesday, according to the Dutch company.

The Dutch government said it understood GasTerra’s decision not to comply with Gazprom’s demand for payment in rubles.

“This decision has no consequences for the physical supply of gas to Dutch families,” the Dutch Minister of Climate and Energy Rob Gettin He said on Twitter on Monday. The Netherlands depends on Russia for about 15% of its gas supplies per Reuters.

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The Dutch government It says on its website that the country has sufficient gas reserves in the short term and plans to import more LNG from countries other than Russia.

Denmark could be next

In neighboring Denmark, energy company Orsted has also warned against cutting gas supplies to Gazprom because it is also refusing to pay in rubles.

“We have no legal obligation under the contract to do so, and we have repeatedly told Gazprom Export that we will not,” Ørsted said in a press release. Monday press release.

The electric company said that Ørsted plans to continue to pay in euros for a payment due on Tuesday, “there is a risk that Gazprom Export will stop supplying Ørsted with gas.”

Ørsted said it expected to be able to buy gas from the European gas market. The Netherlands and Denmark both produce their own natural gas.

The Danish Energy Agency said in a Monday press release It does not expect any immediate impact from the cutting of natural gas by Gazprom and has a contingency plan in place.

Gazprom did not immediately respond to an Insider’s request for comment.

Gazprom has already cut off gas supplies to Poland and Bulgaria And the Finlandas they all refused to pay in rubles.

Not all of Europe is ready to get rid of Russian natural gas right now. Some big buyers like Italian Eni And the German Uniper They opened accounts in Gazprombank to fulfill Russian payment requests.