President Vladimir Putin said last month that “unfriendly” countries would have to pay in rubles instead of euros or dollars stipulated in contracts. Buyers can make payments in euros or dollars to an account in Russia’s Gazprombank, which will then convert the money into rubles and transfer it to a second account through which the payment is made to Russia.
Germany’s Uniper said on Thursday it would continue to pay for Russian gas in euros but added that it believed a “penal law-compliant transfer of payments” was possible.
“Uniper is in talks with its contracting partner about tangible payment methods and is also in close coordination with the German government,” the company said in a statement.
Germany has reduced its consumption of Russian gas to 35% of imports from 55% before the war in Ukraine, but says it needs to keep buying from Moscow until at least next year to avoid a deep recession.
Uniper said it could not cope without Russian gas in the short term.
“This will have dire consequences for our economy,” she said in her statement.
There could be an alternative solution. The European Commission issued directives to EU member states last week saying it was “apparently possible” for buyers to comply with the new Russian rules without conflicting with EU law.
Eurasia Group said in a note on Thursday that EU governments are likely to allow the payment mechanism to go ahead.
Other analysts aren’t quite sure, and say the process won’t be simple. European customers may inadvertently fall under sanctions if they use the Gazprombank mechanism.
“The conversion into rubles may involve sanctioned entities, and that may not be obvious to the buyer,” Kushal Ramesh, chief analyst at Rystad Energy, told CNN Business.
Eurasia Group said the new payment mechanism will likely take some time to implement, but Gazprom is expected to show flexibility with upcoming payment deadlines.
– Robert North Contribute to this report.