Russia’s Gazprom Requests GAIL India To Make Payments Of Gas In Euros, Says Report

GAIL, which has a long-term gas import deal with Gazprom Marketing & Trading Singapore, annually buys 2.5 million tonnes of liquefied natural gas and has been settling trade with Gazprom in US dollars

GAIL India, which operates the largest gas pipeline in India, is examining the request made by Gazprom. Image: Getty

New Delhi: Gazprom, Russia’s leading multinational energy corporation, has asked GAIL (India), the country’s largest gas transmitter, to pay for gas imports in euros instead of dollars, quoting two sources news agency Reuters has reported.

This development comes as the Russian energy giant seeks to wean itself away from the US currency in the wake of the ongoing Russia-Ukraine conflict.

The US and several European countries have imposed strict sanctions on Russia since Moscow invaded Ukraine on February 24.

Gazprom sent a letter to GAIL last week requesting that the company settle payments for gas purchases in euros instead of dollars.

The state-run Indian company is still examining the request made by Gazprom, according to the sources familiar with the matter.

GAIL, which has a long-term gas import deal with Gazprom Marketing & Trading Singapore, annually buys 2.5 million tonnes of liquefied natural gas (LNG) and has been settling trade with Gazprom in US dollars. So far, Gazprom is supplying the volumes committed to under its contract with GAIL.

India’s largest gas transmitter also imports and distributes gas, and operates the largest gas pipeline network in the country.

Reuters mentioned quoting of the sources, “GAIL doesn’t see any problem in settling payment in euros as European countries are paying for their imports in euros.”

The sources said that sanctions might not hit payments in euros because GAIL's contract is with a Singapore unit of Gazprom.

However, both GAIL and Gazprom did not respond to Reuters’ request seeking comment.

The sanctions by the West have dealt a severe blow to Russia's economy, but the European Union, which relies on Russian oil and gas, has stopped short of placing curbs on energy imports and continues to pay in euros to Russia.

Russian President Vladimir Putin on Wednesday said that Russia, the world’s largest gas producer, will soon require “unfriendly” countries to pay for fuel in roubles.

India, which has refrained from outright condemnation of Russia, though has called for an end to violence in Ukraine, has not banned Russian oil and gas imports, unlike several Western countries.

On the contrary, Indian companies are snapping up Russian oil as it is available at a deep discount after some companies and countries shunned purchases from Moscow.