Denmark's Orsted Warns of Russian Gas Supply Halt After Spurning Ruble Payments
COPENHAGEN (Reuters) — Orsted on Monday warned that Russia's Gazprom Export could stop supplying gas to the Danish energy company because it has refused to pay in rubles, but such a move would not immediately put Denmark's gas supplies at risk.
Russia's rouble payment scheme has exposed cracks in the European Union's united response towards the Ukraine conflict, with some countries refusing to pay in rubles and others finding ways to comply.
"Gazprom Export continues to demand that Orsted pays for gas supplies in rubles," Orsted said in statement. "We have no legal obligation under the contract to do so, and we have repeatedly informed Gazprom Export that we will not do so."
"There is a risk that Gazprom Export will stop supplying gas to Orsted. In Orsted’s view, this will be a breach of contract," it added.
There is no gas pipeline directly from Russia to Denmark, which means Moscow will not be able to directly halt supplies to the country.
The Danish Energy Agency said it would not have any immediate supply consequences for Denmark if Russia were to halt sales of gas to Orsted. The agency also said it had an emergency plan if there were to be any gas shortage.
Orsted said it expected it would be possible to buy gas on the European market.
"We have been preparing for this scenario to minimize the risk to Orsted's gas customers, which are primarily major companies in Denmark and Sweden," the company said.
It was not clear whether supplies will be cut after Orsted's payment deadline on May 31.
Gazprom did not immediately reply to a Reuters request for comment.
SUPPLIES CUT
Poland, Bulgaria and Finland have refused to comply with Moscow's demand to change the payments method, and their gas supply has subsequently been cut off.
German, Italian and French companies have said they would engage with the ruble scheme to maintain supplies.
Under Russia's ruble payment system, buyers must deposit euros or dollars into a Gazprombank account, where the bank converts it into rubles.
Orsted has previously said its Gazprom contract accounts for the vast majority of Denmark's gas consumption and roughly 1.5% of total Russian supplies to Europe, which last year totaled around 155 billion cubic meters (bcm).
Orsted sold its oil and gas assets in 2017 to focus on offshore wind energy but retains a long-term gas deal with Russia's Gazprom GAZP.MM which runs until 2030.
Related News
Related News
- Trump Aims to Revive 1,200-Mile Keystone XL Pipeline Despite Major Challenges
- ONEOK Agrees to Sell Interstate Gas Pipelines to DT Midstream for $1.2 Billion
- Energy Transfer Reaches FID on $2.7 Billion, 2.2 Bcf/d Permian Pipeline
- Boardwalk Approves 110-Mile, 1.16 Bcf/d Mississippi Kosci Junction Pipeline Project
- Kinder Morgan Approves $1.4 Billion Mississippi Crossing Project to Boost Southeast Gas Supply
- Tullow Oil on Track to Deliver $600 Million Free Cash Flow Over Next 2 Years
- GOP Lawmakers Slam New York for Blocking $500 Million Pipeline Project
- Energy Transfer Reaches FID on $2.7 Billion, 2.2 Bcf/d Permian Pipeline
- Polish Pipeline Operator Offers Firm Capacity to Transport Gas to Ukraine in 2025
- Macquarie, Dow Launch $2.4 Billion Gulf Coast Pipeline Infrastructure Partnership
Comments