Russia’s majority state-owned multinational energy corporation, Gazprom, has announced it has “completely suspended gas supplies” to Poland and Bulgaria.
Supplies to Bulgaria’s gas company, Bulgargaz, and Poland’s state-controlled energy supplier, PGNiG, will be cut completely from Wednesday, due to their refusal to pay for fuel supplied in roubles.
PGNiG has declared the move a breach of the 1996 Yamal Contract with Gazprom, which is for 10.2 billion cubic meters (bcm) per year, and covers about 50% of Poland’s national consumption.
A statement PGNiG declared their “right to seek compensation”, and that they would use “all available contractual and legal means to do so”.
Gazprom also suspended supplies to Bulgarian state gas company, Bulgargaz, with Bulgaria’s contract with Gazprom also due to expire at the end of the year, and which provides over 90% of its gas needs.
Gazprom also reminded Poland and Bulgaria that as transit countries hosting the Yamal-Europe pipeline which provides supplies reaching Western Europe, that unauthorised withdrawals made on volumes intended for third countries, will result in a reduced supply of gas to Western Europe.
Early in April, Russian President Vladimir Putin announced that countries that have deployed sweeping sanctions against Russia, will be required to pay for gas supplies in roubles, regardless of what contracts and agreements may currently be in place.
With an estimated $300 Billion of Russian money frozen in foreign banks, Russia has moved to take payments for gas supplies in its own domestic currency, in an attempt to counter the depreciation of the rouble in the face of sanctions, and prevent nations from further freezing Russian assets.