Chiara Albanese, Bloomberg News
ROME
EnergiesNey.com 04 20 2022
Italy will refuse to comply with new gas-payment terms demanded by Moscow if the European Union concludes that doing so would breach sanctions related to Russia’s invasion of Ukraine, according to people familiar with the matter.
In a preliminary assessment, the EU found that the Kremlin’s payment terms were a clear violation of the bloc’s sanctions. The Italian government is waiting for Brussels to finalize its legal analysis before taking any action, said the people, who asked not to be identified because the process is private.
President Vladimir Putin has threatened to halt gas supplies to buyers that don’t comply with the decree, which involves Russia’s Gazprom PJSC receiving payments in rubles. The loss of those energy supplies would pose a serious threat to the EU, which gets 40% of its gas from Russia.
A spokesperson for the Italian government said they welcome the commission’s ongoing work on the matter but wouldn’t elaborate because the assessment is still preliminary.
On March 31, Putin issued a decree stipulating that “unfriendly” buyers of its gas open two accounts, one in a foreign currency and one in rubles, with Gazprombank. The Russian bank would convert the foreign currency payments into rubles before transferring the payment to Gazprom, the state-owned gas company.
A preliminary analysis by lawyers for the European Commission, the EU’s executive arm, found that payments using this system would violate the bloc’s sanctions, according to a person familiar with the matter. Lawyers for the European Council, the institution composed of the leaders of the 27 member states, concurred with the commission’s assessment, another person said.
Last week, the Dutch government told energy companies in the Netherlands to refuse the new Russian payment terms, citing the EU assessment. Member states including Italy are continuing to scrutinize the report, and Moscow could still provide clarifications or adjustments to the terms.
The EU is racing to find alternative energy sources as it seeks to become less reliant on Moscow. During a Tuesday call with U.S., European and Asian allies, Italian Prime Minister Mario Draghi pushed the leaders to speed up the process of diversifying gas imports from Russia, one of the people said.
Separately, Italy is set to announce new energy deals with the Republic of Congo and Angola this week which could bring Italy an additional 5 billion cubic meters and 1.5 billion cubic meters of natural gas a year, respectively, the people said. Together with the extra volume it secured from Algeria, that would replace more than half the amount it gets from Russia as early as next year.
bloomberg.com 04 20 2022
