Gazprom suspends gas deliveries to Dutch trader GasTerra

The company logo of Russian natural gas producer Gazprom is seen in St. Petersburg, Russia. ― Reuters file pic

The company logo of Russian natural gas producer Gazprom is seen in St. Petersburg, Russia. ― Reuters file pic

Tuesday, 31 May 2022 7:26 AM MYT

AMSTERDAM, May 31 ― GasTerra will no longer receive gas from Russia’s Gazprom from May 31 after refusing to agree to Moscow’s demands for payment in roubles, the two companies said yesterday.

GasTerra, which buys and trades gas on behalf of the Dutch government, said it had contracted elsewhere for the 2 billion cubic metres (bcm) of gas it had expected to receive from Gazprom through October.

The company is 50 per cent owned by Dutch government entities and 25 per cent each by Shell and Exxon.

“We understand GasTerra’s decision not to agree to Gazprom’s unilaterally imposed payment conditions,” Dutch Energy Minister Rob Jetten wrote on Twitter. “This decision will have no consequences for the physical delivery of gas to Dutch households.”

A GasTerra statement said the Dutch company had decided not to adopt the system that Russia had demanded, which involved the setting up of accounts that would be paid in euros and then swapped for roubles.

The company said such measures could violate European Union sanctions and also said the payment route presented too many financial and operational risks.

A statement from Gazprom said that its suspension of gas supplies to GasTerra will continue until payments are settled in line with the Russia-proposed scheme.

GasTerra said that it had repeatedly asked Gazprom to adhere to its contractual payment methods and delivery obligations.

“It is not possible to say in advance what impact the dropping off of 2 bcm of Russian gas will have on the supply and demand situation in the European market,” the Dutch company added.

Economy Affairs Ministry spokesperson Pieter ten Bruggencate said the Netherlands would not initiate its emergency gas plan to ask industrial users to reduce consumption.

“This is not yet seen as a threat to supplies,” he said.

A spokesperson for the country’s national grid operator, Gasunie, said it does not expect disruption to the grid as a result of Gazprom ceasing deliveries to GasTerra. ― Reuters