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Russia cutting off gas supplies to Poland, Bulgaria for refusing to pay in rubles

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Polish and Bulgarian officials said Tuesday that Russian energy company Gazprom informed them it was suspending natural gas supplies to the two countries for their refusal to pay in Russian rubles

The suspensions, which would take effect Wednesday, would be the first since Russian President Vladimir Putin said last month that “unfriendly” foreign buyers would have to pay the state-owned Gazprom in rubles instead of dollars and euros, according to Fox Business.

Bulgaria said the new gas payment system created considerable risks for the country and that it was working with state gas companies to find alternative sources to replace the supplies it gets from Russia.

But the Bulgarian government said no restrictions on domestic gas consumption would be imposed for now even though the Balkan country of 6.5 million meets over 90% of its gas needs with Russian imports.

Gazprom suspending supplies to other countries would spell economic pain for Europe which heavily relies on Russian natural gas to heat homes, generate electricity and fuel industry. Still, any potential cutoffs are a two-way street, and Russian would likely be hurt as well given its reliance on European customers. 

European leaders said they would not comply with the rubles requirement, arguing that it violated the terms of contracts and their sanctions against Russia over its military aggression against Ukraine. Only Hungary has agreed to Putin’s demands.

Around 60% of imports are paid in euros, and the rest in dollars. Putin’s demand was apparently intended to help bolster the Russian currency amid the Western sanctions imposed over the war.

Poland’s state gas company, PGNiG, said it was informed by Gazprom that its deliveries through the Yamal-Europe pipeline would stop Wednesday morning.

The Yamal pipeline carries natural gas from Russia to Poland and Germany through Belarus. Poland has been receiving some 9 billion cubic meters of Russian gas annually, fulfilling some 45% of the country’s needs.

The Bulgarian Energy Ministry said it was also notified that Bulgaria’s supplies of Russian gas via the TurkStream pipeline would cease on Wednesday. 

Poland has been a strong supporter of neighboring Ukraine during the Russian invasion. It is a transit point for weapons the United States and other Western nations have provided Ukraine.

This week, the Polish government confirmed that it was sending tanks to Ukraine’s army. On Tuesday, it announced a sanctions list targeting 50 Russian oligarchs and companies – including Gazprom.

Bulgaria was once one of Moscow’s closest allies, but relations soured after a new liberal government took the reigns last fall and after Putin’s military invaded Ukraine in February. It has supported sanctions against Russia and provided humanitarian aid to Ukraine.

Poland’s gas company said it was considering legal action over the Russian payment demand. But Polish Climate Minister Anna Moskwa stressed that Poland was prepared for such a situation after working for years to reduce its reliance on Russian energy sources.

Several years ago it opened its first terminal for liquefied natural gas (LNG) in Swinoujscie, on the Baltic Sea coast, while later this year a pipeline bringing gas from Norway, called “Baltic Pipe,” is to become operational.

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