Gazprom suspends gas supply to Orsted | Rigzone

Gazprom has announced that it has completely suspended gas deliveries to the Danish Orsted Salg & Service A/S “due to a default in payment in roubles”.

The announcement was made on the company’s Twitter page and included a link to a press release on Gazprom’s website, although Rigzone is currently unable to access Gazprom’s site and has no was able to for some time.

In a statement posted on its website on Tuesday, Ørsted said that Gazprom Export had informed Ørsted that the company would stop gas supplies to Ørsted on June 1, 2022, at 6:00 a.m. CEST.

“At Ørsted, we remain firm in our refusal to pay in roubles, and we have prepared for this scenario, so we still expect to be able to supply gas to our customers,” said Mads Nipper, Group Chairman and CEO of ‘Ørsted. , said in the statement.

“The situation underpins the need for the EU to become independent of Russian gas by accelerating the development of renewable energy,” Nipper added in the statement.

In a statement posted on its website on May 30, Ørsted revealed that it had repeatedly informed Gazprom Export that it would not pay for the gas supply in roubles. The company warned in the statement that there was a risk that Gazprom Export would stop supplying gas to Ørsted.

“Since there is no gas pipeline going directly from Russia to Denmark, Russia will not be able to directly cut off the gas supply to Denmark, and therefore it will always be possible for Denmark to obtain gas”, Ørsted said in the statement.

“However, this means that gas destined for Denmark must, to a greater extent, be purchased on the European gas market. We expect that to be possible,” Ørsted added.

The company said in the statement that it had prepared for this scenario to minimize the risk to its gas customers, which it said are mainly “large” companies in Denmark and Sweden, experiencing supply shortages. in gas.

“Ørsted has storage capacity, for example in Denmark and Germany, and we are currently filling these storage facilities to secure gas supply for our customers and contribute to market security of supply,” Ørsted said.

“We are in constant dialogue with the authorities about potential scenarios, and we hope that the authorities, who have an overview of the supply situation in Denmark, are prepared for the situation. We will remain in close dialogue with authorities regarding the situation,” the company added.

Ørsted underlined in the press release that a possible shutdown of gas supplies by Gazprom Export did not change its financial outlook for the financial year 2022 or the planned level of investment announced for 2022 and did not change its strategic ambition. and its long-term financial orientations.

The company pointed out that in the first quarter it had reduced the overall hedging level of its Gazprom Export contract to balance the risk against a scenario where Russian gas supplies would be interrupted. Ørsted previously announced that he would donate all 2022 net profits, if any, after hedges and taxes from Gazprom’s export contract to humanitarian aid in Ukraine.

On April 1, Ørsted confirmed that it had received a request from Gazprom Export to pay for gas supplies in roubles. In a company statement at the time, Ørsted said he had no intention of paying in rubles.

In a company statement in March, Ørsted pointed out that it had a long-term gas purchase contract with Gazprom Export. The contract was made in 2006 and expires on its terms in 2030, Ørsted pointed out at the time. The company revealed the contract could not be terminated at that time, but said it would not be extended. A long-term, take-it-or-pay contract was the industry standard for gas supply at the time of signing, Ørsted noted in the statement.

In February, Ørsted said Russian aggression goes against everything Ørsted stands for. Following this development, Ørsted stressed that his management had taken a series of measures, including stopping all biomass and coal supplies for its power plants in Russia, not concluding new contracts with Russian companies , the guarantee that no direct supplier of Ørsted for the development of renewable energies are Russian.

In a statement posted Tuesday on his Twitter page, Gazprom has announced that it has completely suspended the gas supply to GasTerra BV in the Netherlands “due to non-payment in rubles”. In a statement posted on its website on Monday, GasTerra said it had decided not to comply with Gazprom’s “unilateral payment demands”.

In a market note sent to Rigzone in April, Rystad Energy analysts Kaushal Ramesh and Nikoline Bromander noted that Russia fired the first shot at the West. with a gas embargo on Poland and Bulgaria.

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