Russia cuts gas to Netherlands energy firm

Denmark company says it’s preparing for stoppage

Russia will cut natural gas supplied via pipelines to the Netherlands and Denmark could be next.

GasTerra BV said shipments will stop Tuesday after it rejected new payment terms imposed by Gazprom PJSC and President Vladimir Putin. Denmark’s Orsted A/S said it was preparing for a cut as the company, best known for its wind-power business, also refused to cave in.

Russia imposed new payments terms on

European companies, which include opening an account in rubles with Gazprombank. Traders have been closely watching payment disputes, with Gazprom having already stopped supplies to Poland, Bulgaria and Finland as a result.

“GasTerra will not go along with Gazprom’s payment demands,” the company said in a statement on its website. “This is because to do so would risk breaching sanctions imposed by the EU and also because there are too many financial and operational risks associated with the required payment route.”

European nations are split over how to handle Moscow’s demand, and utilities have responded to the challenge differently. Major buyers like Italy’s Eni SpA and Germany’s Uniper SE have said they have found a solution to pay and expect supplies to continue.

Orsted’s payment deadline is Tuesday and the company will continue to pay in euros. “There is a risk that Gazprom Export will stop supplying gas to Orsted,” it said.

Countries still can receive Russian liquefied natural gas as Putin’s demands for rubles covered only supplies from Gazprom. They all have also said that they can cope without the fuel using alternatives.

Still, worries over a potential supply crunch this winter remain. Dutch gas futures for next month, the European benchmark contract, reversed losses, gaining as much as 2.2% after the news of Gazprom’s cut. Prices were later unchanged at about 86.9 euros a megawatt-hour.

The halt in supplies to GasTerra means about 2 billion cubic meters of gas won’t be delivered between now and Oct. 1, when the company’s contract with the Russian energy giant was set to expire, the Dutch firm said. That’s just over 1% of Russia’s total supplies to the European Union last year.

“The European gas market is highly integrated and extensive,” GasTerra said. “However, it is impossible to predict how the lost supply of 2 billion cubic meters of Russian gas will affect the supply/demand situation and whether the European market can absorb this loss of supply without serious consequences.”