The Dutch gas trading company GasTerra will no longer receive natural gas from the Russian Gazprom from next Tuesday. GasTerra announced Monday that it did not want to respond to “the unilateral payment requirements” of the Russian state-owned company.
GasTerra was to receive 2 billion cubic meters of gas from Russia until 31 October this year, which is approximately equal to about 5 percent of the annual requirement of the Netherlands. The supply stop has no direct consequences for the Netherlands, because GasTerra already took this possibility into account. The trading company, which is owned by the Dutch state (50 percent; Shell and Exxon Mobile each own 25 percent) says it has already anticipated Gazprom’s move by purchasing gas elsewhere.
Two months ago, President Putin issued the decree that from now on Russian gas must be paid in rubles. GasTerra refuses to do so because this would possibly constitute a violation of the EU sanctions. The trading company also says that there are “too many financial and operational risks associated with the required payment route”. GasTerra supplies domestic and foreign large-scale consumers such as energy companies and industry.
Also read this article: Paying rubles for Russian gas is banned, European Commission warns
A spokesperson for Gasunie emphasizes that the terminated contract “has no consequences for the security of supply” in the Netherlands. Minister Rob Jetten (Energy, D66) also institutes a tweet that GasTerra’s decision ‘has no consequences for the physical supply’ to households and ‘expectedly’ also not for the supply to the Dutch business community. “However, the cabinet will continue to monitor the situation closely in the coming period,” the minister said.
Oil more important to Putin
Last month, Jetten announced plans that the Netherlands will no longer need Russian gas by the end of this year. This is made possible by saving more energy and importing more gas from other countries. The Netherlands is still dependent on Russian gas for about 15 percent of its gas needs.
According to gas expert Jilles van den Beukel, Gazprom’s decision is not unexpected and the consequences are manageable. “You don’t see the price of gas reacting very much either. But the step is part of a structural development. Deliveries to relatively small countries such as Finland and Bulgaria, and now also the Netherlands, are gradually being discontinued and Germany and Italy are still not affected.”
According to Van den Beukel, the gas flow from Russia is getting smaller and smaller in this way. “Oil revenues are much more important to Putin, while gas supplies are more crucial for Europe.”
Not all gas entering the Netherlands runs through GasTerra. Companies can also do business directly with (subsidiaries of) Gazprom. It is known, for example, that energy company Eneco obtains gas through subsidiary Wingas. A spokesperson emphasizes that nothing has been changed in this contract and that deliveries are settled in euros.