In an interview with vedomosti on July 11, Russian Finance Minister Anton Siluanov strongly approved the proposal of Russian energy giant Gazprom to add liquefied natural gas (LNG) to ruble payments.
When asked to comment on Gazprom's proposal, Vedomosti quoted Minister Siluanov as saying: "We support in all aspects".
Gazprom had previously proposed requiring unfriendly countries to pay for Russian LNG in rubles on July 4. The proposal was made by Gazprom representatives during a roundtable of the National Duma Committee on energy policy for Russia until 2050.
Gazprom believes it is necessary to introduce mechanisms to coordinate gas and LNG exports. The company noted that there was export competition between the two goods, because the gas was paid for in rubles.
In addition, Gazprom also proposed increasing exports to the East rather than the West, meaning that supply will be encouraged to sell to Asian buyers.
On March 31, Russian President Vladimir Putin signed a decree on paying for Russian gas in rubles to unfriendly countries. According to the decree, buyers must open ruble accounts at Russian banks, which will be used to pay for the gas delivered starting from April 1. In case the payments are not made, Russia has the right to terminate the delivery.
Some EU buyers have objected, with the Dutch company GasTerra refusing to pay for Russian gas in rubles - as this could lead to violations of EU sanctions. Danish energy company Orsted has announced that it will continue to conduct transactions in euros.
The European Commission (EC) has previously issued a new regulation allowing European importers to continue paying for Russian gas without violating sanctions against Moscow. The EU's executive agency told EU governments in a closed-door meeting that authorities did not stop companies from opening accounts with Gazprombank.
However, Vice President of the European Commission Frans Timmermans said that gas payments in rubles were unusual and that European companies should pay separately in euros and USD. Meanwhile, Dmitry Belik, a member of the National Duma Committee on international affairs, said that paying in rubles was the only option for the EU.
President Putin's decree on the ruble payment mechanism was issued in the context of Russia being sanctioned on a large scale for its military campaign in Ukraine.
From July 11, Russia will temporarily cut off all gas to the EU via the Nord Stream 1 pipeline for periodic maintenance until July 21.
