Denmark’s Orsted says risk of Russia ending gas supplies

Danish energy company Orsted warned Monday that Russia might cut gas supplies to Denmark soon if it refused to pay in rubles, but that gas could still be secured through the European market.

Orsted, formerly DONG Energy, insisted on continuing to pay for Russian gas deliveries in euros and that the payment deadline was May 31.

“Gazprom Export continues to demand that Orsted pays for gas supplies in rubles,” the company said in a statement.

“We have no legal obligation under the contract to do so, and we have repeatedly informed Gazprom Export that we will not do so.

“Therefore, there is a risk that Gazprom Export will stop supplying gas to Orsted. In Orsted’s view, this will be a breach of contract,” it added.

The company said Russia could not directly cut off gas supplies to Denmark because there is no direct pipeline between the two countries.

This means the country should still be able to secure gas deliveries by purchasing it from the European market.

“We are backing Orsted in this decision,” Danish Prime Minister Mette Frederiksen told reporters in Brussels, where he is attending an EU summit. He described the Russian demand as “unacceptable”.

Orsted also said it was filling up its storage facilities in Denmark and Germany to secure gas supplies to their customers.

Russia says it will only accept payment for natural gas deliveries in its national currency, with buyers required to set up ruble accounts or have their taps turned off.

The measure came in response to a litany of international sanctions on Moscow after it invaded Ukraine on February 24.

Read more; GasTerra says its Gazprom deliveries to end

On May 21, Russia halted supplies to its neighbor Finland — which has angered Moscow by seeking NATO membership — after energy group Gasum also refused to pay in rubles.

Moscow had already cut off Poland and Bulgaria.

And on Monday, the partly state-owned Dutch energy firm GasTerra said Gazprom had informed them that it would cut its gas supplies on Tuesday for the same reason.

Denmark’s government announced plans in April to phase out Russian gas, including converting half of the 400,000 gas-heated households to district heating networks or electric heat pumps by 2028.

Gas accounts for 18% of Denmark’s annual energy consumption. According to the Danish energy agency, domestic production accounted for three-quarters of total gas consumption in 2019, with Russia being one of the main sources of imported natural gas.