Russian gas firm Gazprom to cut some supply to Shell

Russian gas firm Gazprom to cut some supply to Shell

Shell has said it will work to keep gas flowing to its customers in Europe after Russian energy firm Gazprom said it would cut supplies.

Gazprom said it would halt gas to Denmark’s Orsted and to Shell for its contract to supply gas to Germany, after both refused to make payments in roubles, Reuters reported.

Shell said it would continue to get gas from its other sources and continue to phase out Russian fossil fuels.

The move by Gazprom comes after European Union leaders said they will block most Russian oil imports by the end of 2022 to punish Moscow for invading Ukraine.

In response to Western sanctions, Russia has already cut off gas supplies to Poland, Bulgaria, Finland and the Netherlands, after the countries refused to comply with Russian demands to switch to payment in roubles.

The latest move expands that retaliation to Germany and Denmark.

Vladimir Putin’s decree has been seen as an attempt to boost the Russian currency, which has been hit by sanctions, as more foreign exchange demand for roubles is likely to increase demand and push up its value.

Shell said it had not agreed to “new payment terms set out by Gazprom”, which included the creation of Russian bank accounts.

“We will work to continue supplying our customers in Europe through our diverse portfolio of gas supply,” a spokesman said.

“Shell continues to work on a phased withdrawal from Russian hydrocarbons, in compliance with applicable laws and regulations.”

Meanwhile, Orsted said on Monday that Gazprom stopping gas flows would put Denmark’s supplies at risk.

Shell has taken a hit of $5bn (£3.8bn) from offloading its Russian assets as part of its plans to withdraw sever ties with the country. It also confirmed it had quit its joint ventures with Gazprom.

The firm pledged in April to no longer buy oil from Russia, but said contracts signed before the invasion of Ukraine would be fulfilled.