Shell may face difficulty paying for Russian gas due to UK sanctions

Shell may face difficulty paying for Russian gas due to UK sanctions

Energy















Bloomberg

Shell Plc may have difficulty paying for Russian gas supplies this month because the

Kremlin wants payments transfered through UK-sanctioned Gazprombank JSC, according to two people familiar with discussions in Russia.

Gazprom PJSC, the single largest provider of natural gas to the European continent, now only accepts ruble payments for supplies of the fuel to so-called ‘unfriendly’ states, including the EU and the UK. Shell has at least two long-term contracts that would be affected by this rule, jointly equivalent to about 1.5% of Gazprom’s annual exports to key foreign clients.

To keep receiving Russian natural gas, all European buyers now need two accounts in Gazprombank, one in rubles and one in a foreign currency, with the Russian bank responsible for making the conversion. This is not possible for Shell because the Gazprom-owned lender was sanctioned by the UK in retaliation for the invasion of Ukraine.

European nations, which rely on Russia for about 40% of their gas, are still getting to grips with the payment rules imposed by the Kremlin and assessing their impact on the continent’s energy security. Europe has announced plans to wean itself off Gazprom’s