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Gazprom cuts gas supplies to Germany after Shell refused to pay in rubles

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Gazprom made the announcement on Tuesday – the same day it cut off gas supplies to the Netherlands for the same reason.

In a March 31 decree, Russian President Vladimir Putin demanded that payments for natural gas be made in rubles, which would mean opening an account in euros and rubles at Gazprombank for processing payments.

According to the quoted source, Shell Energy Europe announced to Gazprom that “it does not intend to make payments under the contract for the supply of gas to Germany in rubles,” Gazprom reported on its Telegram channel.

“By the end of May 31 (the payment deadline set by the contract), Gazprom Export had not received any payments from Shell Energy Europe Limited for gas deliveries in April,” the Russian company wrote.

Thus, “Gazprom Export has notified Shell Energy Europe Limited of the suspension of gas supply under this contract from June 1, 2022” – until the payment in rubles, the Russian company continued.

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Gazprom supplies Shell with up to 1.2 billion cubic meters of natural gas a year. That is, only 2.6% of the 95 billion cubic meters of natural gas that Germany consumes every year, Business Insider states.

While Shell has refused to pay Gazprom in rubles, major German natural gas importers Uniper and DWE have paid for Russian fuel under Moscow’s new payment plan, Reuters reported on Tuesday.

Uniper is the largest Russian gas importer in Germany. It depends on Russia for more than half of its natural gas needs, according to Bloomberg. The German energy giant is also the largest gas import and storage company in the country, according to the media.

Germany could fall into a “significant recession” if Russian gas and oil supplies were cut off, a top banker said in April. The power plant is heavily dependent on Russian gas, which accounted for 55 percent of Germany’s gas imports in 2021 and 40 percent of its gas imports in the first quarter of 2022, Reuters reported.

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The German Ministry of Economy did not immediately respond to Insider’s request for comments sent outside normal business hours. However, a German government spokesman told CNN on Tuesday that he was “monitoring the situation very closely.”

Shell told Insider that “it did not agree with the new payment terms set by Gazprom.” Also, the energy giant has not opened any special account to process payments in rubles.

“We will work to continue to supply our customers in Europe with our diverse gas supply portfolio,” Shell said in a statement.

On Tuesday, Gazprom said it had completely suspended gas supplies to GasTerra because of the “ruble mismatch” of the Dutch trader.

Gazprom has already cut off gas supplies to Poland, Bulgaria and Finland because they all refused to pay in Russian.

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