Italy ready to pay for Russian gas in rubles – POLITICO

ROME — European energy firms should be temporarily allowed to comply with Russian demands to pay for gas in roubles, said Roberto Cingolani, Italy’s energy security minister.

“I think it would be good for a few months, at least, to allow companies to go ahead and pay in rubles, while we understand the legal framework and the implications,” he said. to POLITICO, adding that he wanted “a quick and very clear settlement.” European Commission statement” confirming that oil and gas companies can pay in rubles at the moment.

In the meantime, Rome is preparing for a possible cut in Russian gas with energy saving measures, or even keeping coal-fired power plants in operation longer.

The Kremlin has demanded that energy companies in “hostile countries” – which includes all EU members – pay for gas in rubles in a bid to prop up the value of the Russian currency.

The companies are supposed to open accounts in euros and rubles with the Russian bank Gazprom, and Russians would not consider gas payment complete until the rubles have been deposited.

The European Commission has warned companies not to open ruble-denominated accounts, saying it would violate sanctions imposed on Russia for invading Ukraine. Its guidelines say that utilities can pay in euros — and that such payment would be considered final under existing contracts — and that Russia can then later convert them to rubles.

For now, the Kremlin insists that companies stick to its agenda. Russian state-controlled Gazprom last week cut gas supplies to Poland and Bulgaria after refusing to comply with Moscow’s request.

But Cingolani, Italy’s green transition minister, said it could take months to fully understand the legal implications, leaving oil and gas companies in a bind.

“I think oil and gas companies can’t risk paying and then being accused of violating sanctions, but at the same time they can’t risk not paying in rubles,” he said. he said ahead of Monday’s crisis talks of EU energy ministers in Brussels. “These are long-term contracts, the costs would be extremely high.”

His proposed workaround is similar to the Commission’s. The EU energy company would consider payment in euros as the final transaction, while Russia may instead consider payment in rubles after the conversion. But he acknowledged that such an approach could be “optimistic”.

“In this process, there are gray areas, which could constitute a violation of the sanctions. Whichever way you do it, there is a problem.

Emergency plans

In the meantime, Cingolani’s ministry is preparing contingency plans in case Russia cuts its gas exports to Italy. The country receives about 29 billion cubic meters of gas per year, or 40% of its demand, from Russia.

Cingolani said Italy was in a state of “pre-alert”, the lowest of three crisis levels envisaged in its national gas emergency plan, which he said meant “observation and surveillance constants”. He will present plans for different scenarios to the cabinet on Monday afternoon.

At the moment, there are “no plans for controlled power outages for the industry”, he said, but if the situation worsens, there are “contingency plans” for save energy this winter. “For now, we are thinking of weaker measures, temperature restrictions, coal power generation, which was being phased out, will continue to operate for a year or two,” he said. he said, as well as boosting renewable energy.

He said the government would issue guidelines asking people to turn down the air conditioning in private homes, which he said was happening anyway due to high prices. The measures “are not draconian. If necessary, we can do more, with stronger effect. I hope we won’t need it.

Italy is scrambling to boost gas supplies, with state-controlled energy giant Eni signing contracts with African countries. With these agreements, Italy’s energy diversification is “complete”, Cingolani said, adding that Italy would be independent of Russian supplies by the end of next winter.

Even if the war ends, Rome has no intention of returning to such overwhelming dependence on Russian supplies, he said.

“We have learned that it is not smart to have a heavy reliance on one country,” Cingolani said. “I knew it and I said it in advance, but paradoxically we are only working on solving it because there is a war. It is a sad, terrible thing. I would have liked to do this work difficult in times of peace, rather than driven by a war.

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