Until now, when paying for gas transported by gas pipelines, a system has been used where foreign gas buyers have to open two accounts with a Russian bank, one in foreign currency and the other in rubles, used only for payments for gas transported by gas pipelines. Now there has been talk of paying in Russian currency for liquefied natural gas (LNG).
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Gazprom’s proposal comes after Russia last week took over the operation of the Sakhalin-2 liquefied natural gas plant in retaliation for Western sanctions. A new company was thus created, which took over the rights and obligations of Sakhalin Energy Investment. The companies Shell, Mitsui and Mitsubishi owned a share of less than 50 percent.
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Russia accounts for roughly eight percent of global LNG supplies. LNG comes mainly from the Sakhalin-2 and Jamal LNG projects, which is owned by Novatek and is the largest LNG plant in Russia.
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Russian President Vladimir Putin announced in March that buyers of gas from Gazprom from countries that Russia does not consider friendly must pay for pipeline gas deliveries in rubles. In practice, this means that companies open two accounts in a Russian bank, deposit money in foreign currency into one, and the bank exchanges this money for rubles and transfers it to a ruble account from which deliveries are paid. A number of Gazprom’s clients in Europe rejected this system and Gazprom stopped supplying them with gas.
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Unlike gas delivered by pipeline, most of Russia’s LNG goes to Asia. In Europe, Spain buys Russian LNG.
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Before the conflict in Ukraine, Russia planned to increase production to 140 million tons of LNG by 2035, which is about a quarter of current global LNG exports. But it has since indicated that this goal will probably have to be postponed, Reuters wrote.
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