GasTerra has refused to accept Moscow’s demands for payment in rubles, Dutch company GasTerra said on Monday.
GasTerra will stop receiving gas from Russian company Gazprom from May 31 after refusing to accept Moscow’s demands for payment in rubles, the two companies said on Monday.
GasTerra, which buys and sells gas on behalf of the Dutch government, said it had elsewhere contracted the two billion cubic meters (bcm) of gas it expected to receive from Gazprom by October.
The company is 50% owned by Dutch government entities and 25% each by Shell and Exxon.
“We understand GasTerra’s decision not to accept the payment terms imposed unilaterally by Gazprom,” Dutch Energy Minister Rob Jetten wrote on Twitter. “This decision will have no consequences for the physical delivery of gas to Dutch homes.”
A statement from GasTerra said that the Dutch company had decided not to adopt the system that Russia had demanded, which involved the creation of accounts that would be paid in euros and then exchanged for rubles.
The company said such measures could violate European Union sanctions and also said the payment route presented too many financial and operational risks.
A Gazprom statement said that its suspension of gas supply to GasTerra will continue until payments are settled in accordance with the scheme proposed by Russia.
GasTerra said 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 fall of two bcm of Russian gas will have on the supply and demand situation in the European market,” the Dutch company added.
Economy Ministry spokesman Pieter ten Bruggencate said the Netherlands would not initiate its gas emergency plan to urge industrial users to reduce consumption.
“This still doesn’t look like a threat to supplies,” he said.
A spokesman for the country’s national network operator, Gasunie, said he did not expect network disruptions as a result of Gazprom ceasing to deliver to GasTerra.