The proposal to require payments in rubles for LNG came from Kiril Polous, who is in charge of Gazprom’s long-term development plans, during a meeting of the parliamentary energy committee, Russia’s Interfax news agency reported today. Last week, a decree by Russian President Vladimir Putin said a newly created state-owned Russian company would take over the rights and obligations of Sakhalin Energy Investment Co., the joint venture that runs the Sakhalin-2 oil and gas project. That could mean a forced exit from the project for Shell and Japan’s Mitsui and Mitsubishi, which are minority shareholders of Sakhalin Energy Investment Co. Shell had already announced it would abandon the project a few months ago and has since been looking for buyers for its stake in Sakhalin-2. According to some analysts, the withdrawal of Western and Asian partners will eventually lead to tighter LNG supplies due to a lack of know-how and spare parts. At the same time, selling natural gas would become more difficult because of state control of the project, Saul Kavonic of Credit Suisse told Reuters. Russia already has the ruble-for-gas payment system for the natural gas it sends to Europe via pipeline. Gazprom has already stopped supplying natural gas to countries and companies that refuse to bow to the demand for rubles—Poland, Bulgaria, Finland, as well as customers in the Netherlands, Denmark and Germany. Many European companies have set up ruble accounts at Gazprombank to comply with Putin’s request. But Gazprom cut pipeline supplies to Germany and Italy in mid-June, citing “technical reasons” and saying Western sanctions were preventing a gas turbine being repaired in Canada from returning to Russia in time. Italian Prime Minister Mario Draghi rejected that explanation, describing Russian reasons for reduced flows as “lies.” With a low supply from Russia and Nord Stream for two weeks of maintenance this month, Europe is scrambling to fill gas storage in time for the winter. By Tsvetana Paraskova for Oilprice.com More top reads from Oilprice.com:
