As Russia shuts gas to Poland, Bulgaria, Germany’s Uniper to pay euro for Russian gas via Gazprombank

Russia has demanded payments in roubles for its gas supply, but the payments system which Uniper has proposed foresees the use of accounts at Gazprombank, which would convert payments made in euros or dollars into roubles.

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German power utility Uniper has decided to pay for Russian gas via a transfer to a Russian bank and no longer to a Europe-based bank

German power utility Uniper has decided to pay for Russian gas via a transfer to a Russian bank and no longer to a Europe-based bank.

“The plan is to make our payments in euros to an account in Russia,” the Rheinische Post newspaper reported on Thursday, quoting a Uniper spokesperson.

Russia has demanded payments in roubles for its gas supply, but the payments system which Uniper has proposed foresees the use of accounts at Gazprombank, which would convert payments made in euros or dollars into roubles.

This payment arrangement offers some other countries a loophole to keep buying Russian gas against Western currencies.

With so many European Union members reliant on Russian energy, the European Commission has said the EU’s gas buyers can engage with Russia’s payment scheme provided certain conditions are met.

Last week, the European Commission said if buyers of Russian gas confirmed payment is complete upon receipt of deposits in euros, as opposed to later when the euros have been converted to roubles, that would not breach sanctions.

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Uniper said it could pay without violations. Austria and Hungary, among others, have also indicated they will take this route.

According to a Financial Times report, Last week, the European Commission said if buyers of Russian gas confirmed payment is complete upon receipt of deposits in euros, as opposed to later when the euros have been converted to roubles, that would not breach sanctions.

Italy’s Eni, another of Gazprom’s large customers, is evaluating its options.

The Rome-backed company has until the end of May, when its next payment for Russian supplies is due, to make a final call, Italian officials told the FT.

Russian energy giant Gazprom earlier said it had halted gas supplies to Poland and Bulgaria in its toughest response so far to Western sanctions imposed against Moscow after its invasion of Ukraine.

Bulgaria and Poland, former Soviet-era satellites that have since joined the EU and NATO, are the only two European countries with Gazprom contracts due to expire at the end of 2022, which meant their search for alternatives was under way.

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