Italy's Eni opens ruble, euro accounts to pay for Russian gas

AFP , Tuesday 17 May 2022

Italian energy giant Eni said Tuesday it was opening accounts in euros and in rubles to fulfil payments due imminently for the supply of Russian gas, thus complying with Moscow's demands.

Logo for ENI
A logo, in coloured gravel, of Italian multinational oil and gas company ENI at the group s San Donato oil and gas laboratory in Milan. AP


It was not immediately clear whether Eni's move would fall afoul of European Union sanctions, although Eni said it was "not incompatible".

In a carefully worded statement, Eni said its opening of the two accounts with Gazprom Bank was "on a precautionary basis" as "deadlines for the payment of gas supplies are scheduled for the next few days".

Moscow has demanded that clients from "unfriendly countries" -- including EU member states -- pay for gas in rubles, a way to sidestep Western financial sanctions against its central bank.

The announcement from Eni came as Finland's state-owned Gasum warned that Russia could soon cut gas supplies, following Finland's refusal to pay Gazprom in rubles.

Conversion to rubles

Eni said its move was "taken in compliance with the current international sanctions framework" and that Italian authorities had been informed.

"As of today, Gazprom Export and the relevant Russian federal authorities have confirmed that: (i) invoicing and payment will continue to take place in euros", the currency specified in the supply contracts, it continued.

Furthermore, "a clearing point agent operating at the Moscow Stock Exchange will carry out the conversion into rubles within 48 hours without any involvement of the Central Bank of Russia".

If the conversions were not performed on time, "there will be no impact on supplies" of gas, it said.

Ahead of Eni's announcement, the European Commission said anything going beyond paying for the contracts in the stipulated currency violated sanctions.

"The companies have to pay the contracts in the currency... foreseen by the contract," Commission spokesman Eric Mamer told journalists in Brussels.

"Anything that goes beyond that is in breach of the sanctions. We can't be clearer."

Eni, however, said: "The new procedure should be neutral in terms of both cost and risk, and not incompatible with the existing sanctions. The payment obligation can be fulfilled with the transfer of euros."

There was no immediate reaction from Italy's government.

In the ongoing dispute between Finland and Russia after the Nordic nation rejected a demand from Gazprom Export to pay in rubles, Gasum said it would seek arbitration.

"Gasum considers there to be an increased risk of the natural gas supply ... being halted, and consequently the import of natural gas from Russia to Finland might end," Gasum said in a statement.

Helsinki is currently seeking membership of NATO.

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