Russia will be stopping all shipments of natural gas to the Netherlands. According to the latest report, the suspension for the Gasterra BV's operation will kick off on Tuesday, May 31.
Following this announcement, Denmark could be the next country to be included in the suspension list of Russia when it comes to gas supply.
Russia Cuts Gas to the Netherlands
(Photo : Hendrik Kuterman from Unsplash)
The Kremlin announced that it will soon suspend gas supply shipments to the Netherlands.
In a recent article written by The Strait Times, Russian President Vladimir Putin has reportedly imposed new payment conditions for the Dutch gas trader.
However, this term did not sit well with The Netherlands. Russian multinational power company Gazprom PJSC said that it's now cutting supply with Gasterra.
To prepare for what could come next, Denmark's Orsted, a global leader in wind energy, said that it won't cave into the new payment terms.
Speaking of the payment issues, Russia has passed the terms for the EU-based firms. Upon agreeing to the condition, a company will be required to open an account in rubles. This will be handled by Gazprombank, Russia's state-owned power corporation.
Moreover, traders have been aware of this announcement. The payment disputes have already affected other European countries, including Bulgaria, Finland, and Poland. Russia has already suspended the shipments of natural gas to these countries.
"GasTerra will not go along with Gazprom's payment demands. 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," the Dutch firm posted on its website.
Somehow, other European countries have a different way of handling the payment terms that Russia has imposed. As such, Uniper SE (Germany) and Eni SpA (Italy) noted that there's a solution to address this dispute.
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Denmark is Next in Line
In a similar report by The Strait Times, BloombergNEF analyst Stefan Ulrich said that Denmark could still cope with the possible suspension of natural gas.
The expert noted that the gas imports in the country only make up a very small part of the demand across the continent. This means that this change won't affect the "European balance" at all, Ulrich mentioned.
Although it's a fact that both the Netherlands and Denmark have strong domestic production when it comes to resources, this trend has been dropping over the past years.
Russia to Continue Gas Supply to Serbia
While the Kremlin finalized its decision to cut all the gas shipments to the Netherlands, the government vows to continue supplying Serbia with natural gas.
According to Business Insider, Aleksandar Vucic, the President of Serbia, has locked in the terms with Putin over a phone call last Sunday, May 29.
Vucic confirmed that they agreed to a three-year contract that would be "favorable" to the Serbians.
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This article is owned by Tech Times
Written by Joseph Henry
