The confusion is centered on the logistics of the payments themselves. Some European gas buyers have been preparing to settle the Kremlin’s demand that gas bills be paid in rubles, rather than euros or dollars as stipulated in the contract.
Under Russia’s new payment mechanism, buyers from “unfriendly” countries must open two accounts in Gazprombank – one in euros and the other in rubles – to pay for gas.
But on Tuesday, the European Commission said companies opening accounts with Gazprom to allow their payments to be converted into rubles would be in breach of EU sanctions.
The statement appeared to contradict the guidance given by the committee just four days ago, leading some of Europe’s largest energy companies to think they could solve the currency problem by opening two accounts in Russian banks.
Several large European companies are trying to pay their bills on time without violating sanctions.
“Anything beyond opening an account in the currency of the contract with Gazprombank and making payments to that account, before issuing a statement … said the chief spokesman in a press release.
Since then, European gas distributors, governments and EU officials have struggled to avoid wider supply disruptions while upholding sanctions imposed on Moscow over the invasion of Ukraine.
Last month, the European Commission said that “it seems[ed] May” let the new payment mechanism work. On Friday, it said As long as buyers pay in euros and dollars and “clearly state” that they have done so, they will not be in breach of EU sanctions.
“[Buyer’s should] Consider their contractual obligations with respect to payments made in euros or dollars,” the commission said in a guidance note to EU member states, shared with CNN Business.
European companies try to pay
Friday’s guidance prompted some of Europe’s biggest energy companies to develop new arrangements with payment deadlines looming.
Italy’s ENI said on Tuesday it had started two accounts with Gazprombank, one in euros and the other in rubles. Once deposited in euros, Moscow Stock Exchange agents will convert the funds into rubles within 48 hours, it said.
The company said in a press release that the new process “does not contradict existing sanctions” and that it does not currently face any European regulations that seek to block it.
“We are ready to pay in euros and have opened corresponding accounts,” a company spokesman said. “We therefore act in accordance with European and German regulations.”
CEO Catherine MacGregor said: “We see a solution today that allows us to pay for contracts in currency, which seems acceptable to Gazprom, at least in our understanding. Compliant with EU sanctions.” The reporter answered the phone.
MacGregor said Engie’s next petrol payment was imminent, but did not say whether it had or planned to open an account with Gazprombank.
German gas distributor Uniper said last month that it would continue to pay for Russian supplies in euros, but added that it believed a “sanctions-law-compliant conversion of payments” was possible.
However, not everyone agrees.
Finland’s state-owned gas company Gasum said on Tuesday it “does not accept” Gazprom’s terms of payment and is preparing to cut off its gas supplies from Russia.
— Robert North contributed reporting.
