Economy

Italy’s ENI opens rubles bank account for Russian gas payments

New payment procedure ‘not incompatible’ with EU sanctions

Alvise Armellini   | 17.05.2022
Italy’s ENI opens rubles bank account for Russian gas payments

ROME

Italy’s energy company, ENI, said Tuesday it opened two bank accounts in Russia’s Gazprom Bank -- one in euros and the other rubles -- to keep paying for Russian gas deliveries.

ENI, which is controlled by the Italian state, said it informed the government of the decision, insisting it was in “compliance with the current international sanctions framework” hitting Russia in retaliation for its war in Ukraine.

Russian President Vladimir Putin said in March that his country would no longer accept payments in euros for gas and demanded rubles -- a request that was initially rejected by EU countries.

But since, a compromise solution emerged, whereby EU energy companies would nominally keep paying in euros via Gazprom Bank, but then allow the money to be moved to another bank account and converted to rubles.

Last week, during a visit to the US, Italian Prime Minister Mario Draghi said the arrangement was acceptable as long as it is not formally declared in breach of the EU sanctions regime. “It’s a grey zone here,” he said.

“The new procedure should be neutral in terms of both cost and risk, and not incompatible with the existing sanctions. The payment obligation can be fulfilled with the transfer of euros,” ENI said in a statement.

But the Italian company said it was seeking “complete, exhaustive and contractually grounded” clarifications from Gazprom “to resolve the uncertainty regarding the changes introduced by the new payment procedure and the correct allocation of costs and risks.”

Otherwise, ENI threatened to “start an international arbitration based on Swedish law,” It also said it was ready to comply with “any possible future” EU decision to sanction the Russian gas sector.

Italy is one of the biggest buyers of Russian gas in Europe. Last year, Gazprom covered about 40% of its domestic consumption. But Rome is now trying to drastically reduce its energy dependence on Moscow, with new gas supply deals from Africa and elsewhere.

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