Russia’s Gazprom seeks gas payments in euros from India’s GAIL: sources

So far, Gazprom is delivering the volumes committed under its contract with GAIL

So far, Gazprom is delivering the volumes committed under its contract with GAIL

Gazprom has asked India’s largest gas broadcaster GAIL (India) to pay for gas imports in euros instead of dollars, two sources said, in a sign that the Russian energy giant wants to withdraw from the US currency in the wake of the conflict in Ukraine .

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

GAIL has a long-term gas import agreement with Gazprom Marketing & Trading Singapore to purchase 2.5 million tons of liquefied natural gas annually and has settled dollar-denominated trade with Gazprom.

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

Last week, Gazprom wrote to GAIL requesting that the company settle payments for gas purchases in euros instead of dollars, sources familiar with the matter said, adding that the state-run Indian company is still investigating the request.

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

The sources said sanctions may not affect payments in euros, as GAIL has a contract with a Singaporean unit of Gazprom.

Gazprom and GAIL did not respond to Reuters emails seeking comment.

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

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

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

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

The sources said that Gazprom is so far delivering the volumes promised under its contract with GAIL.

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

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