Gazprom's European and Turkish customers have found a way out: they will be able to pay for gas

On December 20, US sanctions against Gazprombank, which is a key link in the payment of Russian pipeline gas supplies by European companies, will come into force. The countries of Europe and Turkey were threatened with import stoppage. However, there was a way out. Now funds to Gazprombank can get not directly from European or Turkish customers, but through third parties.

The President of Russia has amended the decree of 2022 on a special procedure for the fulfillment by buyers of obligations to Russian natural gas suppliers. The document is posted on the legal information portal.

Previously, companies from unfriendly countries were required to open currency and ruble accounts at Gazprombank and pay directly for deliveries through the bank, and the bank already bought rubles for the received currency and conversion and settlements took place. The new decree says that now funds from third parties can be credited to the authorized account of Gazprombank in order to pay for gas supplies by a foreign buyer.

Gazprombank reported that the financial institution continues to be the only authorized bank through which payments are made for the supply of natural gas by foreign buyers from unfriendly countries or by foreign buyers supplying natural gas to unfriendly countries.

At the same time, the financial institution clarified that Gazprombank no longer provides assistance to foreign buyers in converting foreign currency into rubles for the purposes of payments for natural gas.

"The obligation to pay for the supply of natural gas is considered fulfilled by a foreign buyer from the moment it is credited to a ruble account opened by a Russian supplier in Gazprombank in rubles," the report says.

If Gazprombank finds itself under full US sanctions in two weeks and only the Sakhalin—2 project has received exceptions, that is, offshore banks and nine Russian financial institutions licensed by the US Treasury to make payments for energy resources. And payments for Russian gas when transferring rubles to Gazprombank can now, for example, be made through them.

"It is obvious that this is an increase in flexibility for payers in the context of US sanctions against Gazprombank. And in case the American regulator does not make the exception requested by some countries," says Alexey Grivach, Deputy director of the National Energy Security Fund (NWF).

Independent industrial expert Maxim Shaposhnikov believes that the adjustments will make minimal changes to the procedure for paying for gas, so Gazprombank remains as an intermediary.

"The currency will be received with the help of other banks that are not yet under sanctions. This is a logical step, as it makes it possible to create short—lived banks necessary for making payments and which are insensitive to subsequent blockages from the United States," the expert says.

By imposing sanctions, the United States has jeopardized Gazprom's supplies to Europe and Turkey. This year, their volume will be about 50 billion cubic meters, whose value may be about $ 18 billion. Hungarian Foreign Minister Peter Szijjarto and Turkish Energy Minister Alparslan Bayraktar said that their countries' companies and other recipients of Russian gas were in a difficult situation. Both countries have requested exemptions from sanctions from the United States, such as those provided for payments for Russian uranium purchased by American companies. At the same time, representatives of Hungary and Slovakia visited Russia to find alternative payment options. Peter Szijjarto stated that they had found a way out in three of the four directions.

Igor Yushkov, a leading analyst at FNEB and an expert at the Financial University under the Government of Russia, adds that an intermediary may also be a third party who will transfer rubles to the appropriate account at Gazprombank.

Also, Vladimir Putin's new decree says that now it is possible to offset counterclaims on the initiative of a Russian supplier. Can this concern the Austrian OMV, which, contrary to the ban of the Russian court, completed international arbitration in November in Stockholm? Then the arbitrators awarded her 230 million euros in compensation, and the company took them from the current payment for Russian gas. After that, Gazprom stopped deliveries due to non-payment.

"Offsetting mutual claims also increases the flexibility of calculations. The Austrians may be concerned, but they initially behaved unconstructively, so I'm not sure that this opportunity will be used automatically by them," says Alexey Grivach.

Igor Yushkov notes that in this case, barter can also be used, when a certain Russian company will transfer funds to pay for gas supplies, and itself will be able to make purchases abroad in the currency of the Gazprom client. The risk is that the intermediary may fall under secondary US sanctions, says a leading FNEB analyst.