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Poland, Bulgaria say Russia cutting gas supply over refusal to pay in rubles

Officials in Poland and Bulgaria said Tuesday that Russia is suspending their countries’ natural gas deliveries after they refused to pay for their supplies in Russian rubles.

The governments of the two European countries said on Tuesday that Russian energy giant Gazprom informed them it was halting gas supplies starting Wednesday.

The suspensions would be the first since Russian President Vladimir Putin said last month that “unfriendly” foreign buyers would have to pay the state-owned Gazprom in rubles instead of other currencies.

Poland’s state gas company, PGNiG, said it was informed by Gazprom that its deliveries through the Yamal-Europe pipeline would stop on Wednesday at 8 a.m.

Later, Bulgaria’s Ministry of Energy said it was notified that the country’s supplies of Russian gas via the TurkStream pipeline would cease on Wednesday as well.

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Poland has been a strong supporter of neighbouring Ukraine during the Russian invasion, which began on Feb. 24. It is a transit point for weapons the United States and other Western nations have provided Ukraine.

The Polish government confirmed this week that it was sending tanks to Ukraine’s army. On Tuesday, it announced a sanctions list targeting 50 Russian oligarchs and companies, including Gazprom.

European reliance on Russian energy

Europe imports large amounts of Russian natural gas to heat homes, generate electricity and fuel industry. The imports have continued despite the war in Ukraine.

About 60 per cent of imports are paid in euros and the rest in dollars. Putin’s demand was apparently intended to help bolster the Russian currency amid the Western sanctions imposed over the war.

European leaders said they would not comply with the rubles requirement, arguing that it violated the terms of contracts and their sanctions against Russia.

The Yamal pipeline carries natural gas from Russia to Poland and Germany through Belarus. Poland has been receiving some nine billion cubic metres of Russian gas annually, fulfilling some 45 per cent of the country’s needs.

Pipelines near a gas processing facility, operated by Gazprom, are seen in Russia ‘s Arctic Yamal peninsula in May 2019. The Yamal pipeline carries natural gas from Russia to Poland and Germany through Belarus. (Maxim Shemetov/Reuters)

Poland’s gas company said it was considering legal action over the Russian payment demand. But Polish Climate Minister Anna Moskwa stressed that Poland was prepared for such a situation after working for years to reduce its reliance on Russian energy sources.

“There will be no shortage of gas in Polish homes,” Moskwa tweeted.

Poland has been working since the 1990s to wean itself off of Russian energy and was already on track to end its reliance on Russian gas this year. It recently moved to stop imports of Russian coal.

Bulgaria distancing itself from Moscow

Bulgaria, once one of Moscow’s closest allies, cut many of the old ties with Russia after a new liberal government took the reins in the fall and after Putin’s military invaded Ukraine.

The government has supported sanctions against Russia, provided humanitarian aid to Ukraine and accommodated 90,000 refugees from Ukraine.

It has been hesitant to provide military aid to Ukraine, but Prime Minister Kiril Petkov and members of his coalition government plan to be in Kyiv on Wednesday for talks with Ukrainian officials.

Bulgarian Prime Minister Kiril Petkov, is shown in Belgrade, Serbia’s capital, on Feb. 8. The new liberal government in Bulgaria has supported sanctions against Russia, provided humanitarian aid to Ukraine and accommodated 90,000 refugees from Ukraine. (Darko Vojinovic/The Associated Press)

Bulgaria said the new gas payment system created considerable risks for the country and that it was working with state gas companies to find alternative sources to replace the supplies it gets from Russia.

But the Bulgarian government said no restrictions on domestic gas consumption would be imposed for now, even though the Balkan country of 6.5 million meets more than 90 per cent of its gas needs with Russian imports.

In Washington, White House press secretary Jen Psaki said the U.S had been preparing for such a move by Russia “in anticipation of the possibility of this happening or a decrease in what they’re providing.”

“Some of that has been asking some countries in Asia who have excess supply to provide that to Europe,” she said. “We’ve done that in some cases, and it’s been an ongoing effort.”

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