Russia likely to keep existing LNG supply contracts intact in Rubles switch: sources

As per two Russian sources, Moscow plans on keeping the contract currency for gas exports to Europe unchanged but will seek final payment in roubles as one of the options to switch the currency of gas trade.

“Only payment currency is changing, the contract currency is not,” explained a source. Case in point: for deals clinched in euros the payment should be made at the official rouble/euro exchange rate set by the Russian central bank, said the source.

Earlier last week, in a phone call, Russian President Vladimir Putin told German Chancellor Olaf Scholz that nothing would change for European partners and that payments would still be made in euros and transferred to Gazprom bank.

Incidentally, the proposed scheme is one of the options and is not final, said sources.

According to a third Russian source, Gazprombank, Russia’s third-biggest bank, could serve as an intermediary for transactions between the gas buyers and Gazprom.

“The payment should be done in the rouble equivalent on a pre-agreed settlement day,” said sources.

“There is no final decision yet, the work is ongoing,” said a financial source involved in drafting the gas payments scheme.

Neither the Russian central bank, Gazprom or Gazprombank immediately replied to requests for comments.

Moscow has indicated that the Rubles denominated LNG supply would spread to other major Russian exports as well.

On Wednesday, Germany unveiled an emergency plan to manage LNG supplies and ration power in case demand for payments in Rubles leads to a standoff between Russia and Germany.

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