MOSCOW (MRC) -- -Uniper remains in talks with Gazprom and the German government over how to implement Moscow's demand to pay for Russian gas in roubles, which the European Commission said would breach sanctions, said Reuters.
Uniper, in presentation slides published along with final first-quarter results, cited "ongoing discussions with German government and Gazprom on potential implementation" of the decree, which has stoked fears that supplies may be disrupted. The company, Germany's largest importer of Russian gas in which Finland's Fortum owns 78%, declined to comment on details of the talks, only saying that no binding assessment had been made as of now.
Uniper shares were down 3.6% at 1355 GMT after the company also unveiled a six-fold increase in its net debt to 1.98 B euros (USD2.09 B), driven up by soaring energy prices that have caused a greater liquidity need to secure contracts. Uniper's gas midstream business covers a portfolio of around 370 TWh of long-term gas supply contracts, of which about 200 TWh originate from Russia.
The European Commission late on Monday said complying with Russia's proposed scheme in full would breach existing EU sanctions against Russia over its invasion of Ukraine, but promised more detailed guidance on what companies can and cannot legally do.
Brussels suggested last month that buyers of Russian gas could make sanctions-compliant payments if they declare payments complete once they have been made in euros and before their conversion into roubles. Russia's decree says, however, that a buyer's obligation would be deemed complete only after the foreign currency was converted to roubles.
Uniper last week said that it was planning to transfer payments in euros to a Russian account in the future and that the first payment under the mechanism was due at end-May, adding no final decision had been made.
As per MRC, Russia and China have agreed a second long-term gas supply deal, this time for 10 billion cubic metres (bcm)/year which will take total contractual supply between the two countries to 48bcm/year. Gazprom and China National Petroleum Corporation (CNPC) signed a long-term Sales and Purchase Agreement for natural gas to be supplied via the Far Eastern route.
In January, Gazprom completed a feasibility study for the Soyuz Vostok pipeline that would become an extension of the Power of Siberia 2 pipeline through Mongolia and which would have a capacity of 50bcm/year. In addition to the latest supply contract and the existing Power of Siberia contract, this would take potential nameplate supply from Russia to China close to 100bcm/year.
We remind, that in December 2020, SIBUR Holding, Russia’s leading petrochemicals company and one of the most rapidly growing petrochemicals businesses globally, and China Petroleum & Chemical Corporation (Sinopec), China’s leading energy and chemical company, have closed the deal to set up a joint venture (JV) at the Amur Gas Chemical Complex after obtaining all the necessary approvals from the regulators of both countries. SIBUR and Sinopec will hold interest in the JV in the amount of 60% and 40%, respectively.
PJSC Gazprom is a Russian energy company engaged in exploration, production, transportation, storage, processing and sale of gas, gas condensate and oil, as well as production and sale of heat and electricity. The largest company in Russia, the largest gas company in the world, owns the longest gas transmission system (over 160,000 km). It is the world leader in the industry.