Russian energy giant is to cut off natural gas flow to Denmark's Orsted and Shell Energy Europe starting from Wednesday due to failure to make payments in roubles.
'On 31 May, Gazprom Export has informed Orsted that the company will halt the supply of gas to Orsted on 1 June 2022 at 6:00 CEST. Thus, Gazprom Export does not live up to the agreement to supply gas to Orsted,' Orsted said in a statement.
Reiterating that Gazprom Export has maintained its demand that Orsted pay for gas supplies in roubles, the company stressed it is under no obligation to do so under the contract, and the company will continue to pay in euros.
'At Orsted, we stand firm in our refusal to pay in roubles, and we’ve been preparing for this scenario, so we still expect to be able to supply gas to our customers. The situation underpins the need of the EU becoming independent of Russian gas by accelerating the build-out of renewable energy,' Mads Nipper, Group President and CEO of Orsted, was quoted as saying.
The company underlined that Orsted is prepared for the situation and will remain in close dialogue with the authorities regarding the situation.
Meanwhile, Gazprom said that Shell Energy Europe also failed to pay for gas supplies to Germany and the gas volume under the agreement between two companies stood at 1.2 billion cubic meters per year.
In the end of April, Gazprom halted gas flows to Poland and Bulgaria, saying it would keep supplies switched off until the two countries pay their dues in roubles. Natural gas supplies to Finland was also cut on May 21. Earlier on Tuesday, natural gas flow to the Netherlands was stopped due to breach of payment.
Reporting by Emre Gurkan Abay in Moscow
Writing by Ebru Sengul Cevrioglu