Construction is underway on a 200-metre-long pier at Haustrup Strand in West Jutland, Denmark, where the gas pipeline is due to come ashore.
Highlight
- Denmark’s biggest energy company claims Russia has cut off natural gas supplies to the country
- Russia previously stopped natural gas supplies to Finland, Poland and Bulgaria
- Putin signed a decree that said foreign buyers would pay for Russian gas in rubble
Denmark’s biggest energy company said on Wednesday that Russia cut its gas supply as it refused to pay in rubles, the latest escalation on European energy amid the war in Ukraine. Russia had previously halted natural gas supplies to Finland, Poland and Bulgaria for refusing to demand that they be paid in rubles. And on Tuesday the tap was turned off for the Netherlands.
Danish energy company rsted said it still hopes to be able to serve its customers. “We are determined to refuse to pay in rubles, and we are preparing for this scenario,” said First CEO Mads Nipper. “The situation underscores the need for the EU to become independent of Russian gas by accelerating the creation of renewable energy.”
In response to Western sanctions imposed against Russia for its invasion of Ukraine, Russian President Vladimir Putin signed a decree requiring foreign buyers to pay in rubles for Russian gas by April 1. Moscow offered customers to set up an account in dollars to get their natural gas. Or the Euro account in Gazprombank, the third largest bank in Russia, then the second account in rubles. The importer shall pay the gas bill in euros or dollars specified in the contract and instruct the bank to exchange the money for rubles.
“This is not entirely acceptable,” said Danish Prime Minister Mette Fredriksson. “This is a kind of blackmailing on the part of Putin. We continue to support Ukraine, and we distance ourselves from crimes committed by Putin and Russia.” Russian state gas giant Gazprom confirmed on Wednesday that it has supplied gas to Shell Energy Europe and Denmark’s rsted. Supply has stopped, as both companies refused to follow the ruble-payment mechanism.
Gazprom said it had not received payment from any company for the gas it supplied in April and was therefore halting deliveries. The Danish Energy Agency said that in the first 18 weeks of 2022, Russian gas volume accounted for about 25% of the EU’s gas consumption. The agency said there would be no immediate consequences for Denmark losing its supplies.
“We still have gas in Denmark, and consumers can still have gas delivered,” said Kristofer Botzouw, head of the Danish Energy Agency. said in a statement on Monday. “But we have plans ready in case the situation worsens.” Since there is no pipeline going directly from Russia to Denmark, Russia will not be able to cut off gas supplies directly to Denmark, which will still be able to receive it, rsted said. The company said Russia’s move meant Denmark would have to buy more gas in the European gas market.
Denmark has been a net exporter of natural gas for many years, but because its Tyra field in the North Sea is being refurbished, the country currently imports about 75% of its gas consumption through Germany. The Tyra area is expected to reopen in mid-2023. About 380,000 households in Denmark use natural gas for heating through gas boilers, the agency said. On Tuesday, EU leaders agreed to cut all Russian oil imports by about 90% over the next six months. The 27-nation bloc depends on Russia for 25% of its crude oil and 40% of its natural gas.
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