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France’s Engie wants clear EU guidelines on Russian gas payments
Global Banking & Finance Review®
Company
By Dominique Vidalon and Tassilo Hummel
(Reuters) -French utility Engie is still paying for Russian gas in euros, in line with its contracts, and hopes the European Commission will provide clear guidance soon as several companies face payment deadlines this month, its CEO said on Thursday.
“We need clarity and we need rather detailed guidelines from the European Commission on possible payment solutions. What we need from the European Union is clarity,” Catherine MacGregor told a news conference on renewables.
Russian President Vladimir Putin has demanded payments for the country’s gas in roubles in response to sweeping Western sanctions against Russia after its invasion of Ukraine.
Moscow has notably said that foreign gas buyers must deposit euros or dollars into an account at Gazprombank, which would convert them into roubles.
Russia cut off gas supplies to Poland and Bulgaria last month after they refused to pay in roubles under the new arrangement, raising fears that other countries could be next.
MacGregor earlier told RTL radio that Engie was “still paying in euros” and working on a solution to Moscow’s demands, adding that Engie’s stocks are currently “rather full”.
MacGregor said that a halt in Russian gas supplies to Europe was a “credible” scenario and that the main unknown was whether Russia would cut its gas supplies to Europe “before or after summer”.
There are “no worries” over supplies to its clients in May, she added, because the next payments are due by the end of the month.
“What is important is to anticipate next winter. That is why the timing of a halt is key. The bigger our stocks, the easier we will go through next winter,” she said.
Engie, like other European companies in the sector, is preparing for an eventual halt to Russian gas supplies to Europe, diversifying supply sources and “massively” importing Liquefied Natural Gas (LNG).
The company recently sealed a 15-year LNG deal with United States-based NextDecade Corp.
Longer-term expansion in renewables is another part of Engie’s response, MacGregor said.
Russian gas accounts for 20% of Engie supplies and for 40% of Europe’s gas needs.
The European Commission on Monday said that compliance with Russia’s proposed rouble payment scheme in full would breach existing EU sanctions against Russia but promised more detailed guidance on what companies can and cannot do legally.
(Reporting by Tassilo Hummel and Dominique VidalonWriting by Sarah Morland, Dominique VidalonEditing by David Goodman and Jane Merriman)
The European Commission is the executive branch of the European Union responsible for proposing legislation, implementing decisions, upholding treaties, and managing the day-to-day operations of the EU.
Renewable energy is energy generated from natural resources that are replenished at a faster rate than they are consumed, such as solar, wind, and hydroelectric power.
EU sanctions are restrictive measures imposed by the European Union to influence the behavior of countries or individuals, often in response to violations of international law or human rights.
Liquefied natural gas (LNG) is natural gas that has been cooled to a liquid state, making it easier to store and transport, especially over long distances.
Energy supply diversification refers to the strategy of sourcing energy from multiple suppliers or types of energy to reduce dependence on a single source and enhance energy security.
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