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regular-article-logo Monday, 06 May 2024

Russia’s Gazprom seeks gas payments in Euros from GAIL

The sources said that sanctions might not hit payments in Euros because GAIL’s contract is with a Singapore unit of Gazprom

Reuters New Delhi Published 26.03.22, 03:23 AM
Representational image.

Representational image. Shutterstock

Gazprom has asked India’s largest gas transmitter GAIL (India) to pay for gas imports in Euros instead of dollars, two sources said, in a sign the Russian energy giant seeks to wean itself away from the US currency.

GAIL has a long-term gas import deal with Gazprom Marketing and Trading Singapore to annually buy 2.5 million tonnes of liquefied natural gas and has been settling trade with Gazprom in dollars.

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GAIL, which imports and distributes gas, also operates India’s largest gas pipeline network.

Last week, Gazprom wrote to GAIL requesting the company settle payments in euros instead of dollars, the sources familiar with the matter said, adding the PSU is still examining the request.

“GAIL doesn’t see any problem in settling payment in euros as European countries are paying for their imports in euros,” said one of the sources.

The sources said that sanctions might not hit payments in Euros because GAIL’s contract is with a Singapore unit of Gazprom.

Western sanctions have dealt a crippling blow to Russia’s economy, but the European Union, which relies on Russian oil and gas, has stopped short of placing curbs on energy imports and continues to pay in Euros.

President Vladimir Putin said on Wednesday that Russia, the world’s largest gas producer, will soon require “unfriendly” countries to pay for fuel in roubles.

India, however, has refrained from outright condemnation of Russia, although it has called for an end to violence in Ukraine, and it has not banned Russian oil and gas imports, unlike several Western countries.

In fact, Indian companies are snapping up Russian oil as it is available at a deep discount after some companies and countries shunned purchases from Moscow.

The sources said that so far Gazprom is supplying the volumes committed to under its contract with GAIL.

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