The proposal to include liquefied natural gas (LNG) in the rubles-for-gas programme was made public on Monday by a top official, days after Russia attempted to fully control the Sakhalin-2 LNG project. During a meeting of the parliament’s energy committee, Kiril Polous, who is in charge of Gazprom’s long-term development programmes, proposed that payments for LNG be made in rubles, according to the Russian news agency Interfax.
According to a directive issued by Russian President Vladimir Putin last week, the joint venture managing the Sakhalin-2 oil and gas project, Sakhalin Energy Investment Co., will be replaced by a newly established state-owned Russian business.
For Shell and Japan’s Mitsui and Mitsubishi, who are minor partners in Sakhalin Energy Investment Co., this might entail being forced out of the project. Shell has been searching for purchasers for its part in Sakhalin-2 ever since it announced a few months ago that it would be abandoning the project. Some analysts claim that the departure of the Western and Asian partners will eventually result in a shortage of LNG owing to a lack of parts and knowledge.
To collect payment for the natural gas it supplies to Europe through pipelines, Russia already operates the ruble-for-gas payment system. Poland, Bulgaria, and Finland, as well as clients in the Netherlands, Denmark, and Germany, are among the nations and businesses that Gazprom has already ceased delivering gas to because they refused to accede to the ruble demand.
To comply with Russia’s request, numerous European businesses have opened accounts at Gazprombank in Russian rubles. Nevertheless, in the middle of June, Gazprom reduced pipeline deliveries to Germany and Italy, citing “technical reasons” and asserting that Western sanctions prohibit a gas turbine that is being fixed in Canada from arriving in Russia in time. Mario Draghi, the prime minister of Italy, scorned this justification, calling the Russian explanations for the decreased flows “lies.”