Russia’s Gazprom demands euro gas payments from India’s GAIL: sources


So far, Gazprom has delivered the quantities promised in the contract with GAIL

So far, Gazprom has delivered the quantities promised in the contract with GAIL

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 note from the Russian

Energy giant wants to wean itself off the US currency in the wake of the Ukraine conflict.

European countries and the United States have imposed heavy sanctions on Russia since Moscow deployed troops to Ukraine on February 24.

GAIL has a long-term gas import contract with Gazprom Marketing & Trading Singapore for the annual purchase of 2.5 million tons of LNG and has traded with Gazprom in dollars.

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

Last week, Gazprom wrote to GAIL, urging the company to make payments for gas purchases in euros instead of dollars, sources familiar with the matter said, adding that the Indian state-owned company is still considering the application.

“GAIL sees no problem in making payments in euros as European countries pay their imports in euros,” one of the sources said.

The sources said sanctions may not affect euro payments as GAIL’s contract is with a Singapore unit of Gazprom.

Gazprom and GAIL did not respond to Reuters emails asking for comment.

Western sanctions have dealt a crippling blow to Russia’s economy, but the European Union, dependent on Russian oil and gas, has stopped restricting energy imports and continues to pay in euros.

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

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

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

The sources said that Gazprom has so far delivered the volumes promised in the contract with GAIL.

The sources declined to be named as they are not authorized to speak to the media.

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