Russia Company Holds Gas Supply to Poland and Bulgaria over Rouble Payments

Gazprom, a Russian energy company, said today that it had cut off gas supplies to Bulgaria and Poland for failing to pay in roubles, the Kremlin’s harshest reprisal yet to international sanctions over the Ukraine crisis. Russian President Vladimir Putin has requested that “unfriendly” countries pay for gas in roubles or face being shut off, beginning with the April payment deadline. This proposal was denied by the European Union as a rewrite of contracts that required payment in euros.

Poland receives Russian gas via the Yamal-Europe pipeline, which runs west from Russia’s vast gas resources in the far north of the country, supplying Germany and other European countries. Bulgaria is supplied via pipes that run through Turkey.

PGNiG, a Polish state-owned company, confirmed that its Gazprom supplies had been cut off, but stated it was still serving its own clients as needed. “Cutting gas supplies constitutes a contract breach, and PGNiG reserves the right to demand compensation and will use all contractual and legal measures available to do so,” the company added.

Marcin Przydacz, Poland’s Deputy Foreign Minister, told BBC that his country was ready for the potential that Russia will limit gas exports by diversifying its supply. He went on record to say that the suspension demonstrated that Moscow was “not a trusted partner in any form of business” and asked other European countries, such as Germany, to adopt a ban on Russian energy imports.

Gazprom’s supplies cover over half (53 percent) of Poland’s usage and nearly all (more than 90 percent) of Bulgaria’s. Poland stated that it did not require the use of reserves and that its gas storage capacity was 76 percent full. Bulgaria has stated that it is in talks with Turkey and Greece to buy liquefied natural gas, reported Reuters.

Kyiv has urged Europe to stop supporting Moscow’s war campaign by halting energy imports worth hundreds of millions of dollars each day. Germany, Russia’s largest energy buyer, indicated this week that it hopes to stop purchasing Russian oil within days. Weaning Europe off Russian natural gas, which heats its homes, feeds its factories and powers its power plants, would be a considerably more disruptive scenario.