Some of Europe's biggest natural gas utilities have agreed to new payment terms with Russia's Gazprom (OTCPK:OGZPY), according to The Wall Street Journal, defusing the threat of a sharp cutoff of Russian gas to the region after Vladimir Putin demanded to be paid in rubles.
Novak said around half of Gazprom's (OTCPK:OGZPY) 54 clients have opened ruble accounts at Gazprombank, the finance arm of the Russian gas producer, Russian Deputy Prime Minister Alexander Novak said on Thursday.
The Kremlin required European gas buyers to open two accounts, one in euros (or the currency stipulated in the contract) and the other in rubles, at Gazprombank, with buyers depositing funds into the euro account that are then converted into rubles by Gazprombank and automatically withdrawn for payment.
Some European Union officials had warned that a European company opening a ruble account would violate sanctions imposed after Russia's invasion of Ukraine, but Paolo Gentiloni, the EU's economy commissioner, said this week that EU-based companies would not violate the sanctions with the new payment method.
Germany's largest power producer, RWE (OTCPK:RWEOY), said it has opened an account with Gazprombank to pay for gas in euros, and Germany's Uniper (OTC:UNPPY) said it would receive the gas bill in euros and then pay in euros to a Gazprombank account in accordance with Russia's new payment procedure.
France's Engie (OTCPK:ENGIY) said it is testing a new payment mechanism that would keep the gas flowing and not violate sanctions.
Austria's OMV (OTCPK:OMVJF) said it is "working on a sanctions compliant solution," without offering more details.
Italy's Eni (E), one of Europe's biggest buyers of Russian gas, this week agreed to open accounts in rubles as well as euros, saying it will make its first payment under the new terms in the coming days.