Russia is about to cut off some German gas


Gazprom (GZPFY)Russia’s state energy giant said on Tuesday it would suspend natural gas exports to… coincidence (SHLX) As of Wednesday, the company failed to make payments in rubles.

“Shell Energy Europe Ltd. has notified Gazprom Export LLC that it does not intend to make payments under the contract for the supply of gas to Germany in rubles,” Gazprom said in a statement on its Telegram account.

Gazprom said Shell would lose up to 1.2 billion cubic meters of annual gas supply – just a fraction of the 95 billion cubic meters the country consumes each year, according to Germany’s economy ministry.

But Gazprom’s move is likely to cause concern German industryWhich is highly dependent on Moscow gas. The country has already managed to reduce Russia’s share of its gas imports to 35% from 55% before the war began.

A German government spokesman told CNN Business it was “closely monitoring the situation.”

“The security of supplies is guaranteed,” the spokesman added.

Gazprom’s announcement comes just a day after it said it would do so stop gas supply To Danish energy company Ørsted and Dutch gas trading company GasTerra, and weeks after they shut down the taps Poland and Bulgaria And the Finland.

In March, Russian President Vladimir Putin threatened to cut off gas shipments to “unfriendly” countries that refuse to pay in rubles, rather than the euros or dollars stipulated in contracts.

Since then, Gazprom has offered customers a solution. Buyers can make payments in euros or dollars to an account in Russia’s Gazprombank, which will then convert the money into rubles and transfer it to a second account through which the payment is made to Russia.

But several European companies, including Shell Energy, refused to comply.

“Shell has not agreed to the new payment terms set by Gazprom,” a Shell spokesperson told CNN Business on Tuesday. “We will continue to supply our customers in Europe with our diverse range of gas supplies.”

Similarly, Dutch company GasTerra said in a statement on Monday that it would not comply with Gazprom’s “unilateral payment requirements”.

Henning Gloystein, director of energy, climate and resources at Eurasia Group, told CNN Business that the recent shutdown does not represent a “significant revenue loss” for Gazprom, given that exports to Shell Germany accounted for less than 1% of total Russian exports to the EU last year.

“By contrast, European energy companies that rely more on Russian supplies … have largely turned to Gazprom’s new payment mechanism in order to protect their operations,” he added.

Inke Kappele, Anna Stewart and Robert North contributed reporting.