In continuing fallout from the Ukraine war, Russian energy giant Gazprom vowed to cut off its natural gas flow to Denmark's Orsted and Shell Energy Europe starting Wednesday due their refusal to make payments in rubles.
"On 31 May, Gazprom Export has informed Orsted that the company will halt the supply of gas to Orsted on 1 June 2022 at 6:00 CEST," Orsted said in a statement.
Reiterating that Gazprom Export has maintained its demand that Orsted pay for gas supplies in rubles, Orsted stressed it is under no obligation to do so under the contract, and the company will continue to pay in euros.
"At Orsted, we stand firm in our refusal to pay in rubles, and we’ve been preparing for this scenario, so we still expect to be able to supply gas to our customers. The situation underpins the need of the EU becoming independent of Russian gas by accelerating the build-out of renewable energy," Mads Nipper, Orsted’s CEO, was quoted as saying.
The company underlined that Orsted is prepared for the situation and will remain in close dialogue with authorities on the situation.
Gazprom also said that Shell Energy Europe failed to pay for gas supplies to Germany, and that the gas volume under the agreement between two companies stood at 1.2 billion cubic meters per year.
At the end of April, Gazprom halted gas flows to Poland and Bulgaria, saying it would keep supplies switched off until the two countries pay in rubles. Natural gas supplies to Finland were also cut on May 21. Earlier Tuesday, natural gas flow to the Netherlands was stopped due to breach of payment.
Russia introduced the ruble payment requirement under the pressure of international sanctions over the war on Ukraine, especially from the West.
According to UN estimates, at least 4,113 civilians have been killed and 4,916 injured in Ukraine since the war began on Feb. 24, with the true toll believed to be much higher.
Over 6.8 million people have fled to other countries, while more than 7.7 million have been internally displaced, according to the UN refugee agency.