Buyers from Japan and South Korea have yet to be asked to pay rubles for Russian LNG imports


Russia’s new 100-ruble banknote is displayed during a presentation in Moscow, Russia June 30, 2022. REUTERS/Evgenia Novozhenina

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July 5 (Reuters) – Major Asian buyers of Russian liquefied natural gas (LNG) said they had not yet received requests for payment of supplies of Russian rubles after a senior official at gas producer Gazprom (GAZP.MM) has launched a proposal to expand the payment scheme.

The proposal came just days after Russia decided to seize operations of the Sakhalin-2 LNG plant in retaliation for Western sanctions, raising supply issues for major buyers such as Japan and South Korea. South.

Russia has already demanded ruble payments from European oil and gas buyers as its economy, cut off from the global financial system, faces the worst crisis since the collapse of the Soviet Union in 1991.

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Receiving payments for energy exports in rubles is helping Moscow circumvent sanctions and fund its war in Ukraine, which it calls a “special military operation”. Read more

Kirill Polous, deputy department head at Gazprom (GAZP.MM), said the Russian gas producer had offered to expand its ruble-for-gas program to cover liquefied natural gas (LNG), the news agency said. Interfax, quoting the senior manager on Monday. Read more

Spokespersons for Japan’s largest LNG importer JERA, Japanese utility Kyushu Electric (9508.T) and South Korean state-owned Korea Gas Corp (KOGAS) said the companies do not had not yet received a request for payment for the supply of LNG in rubles.

Kyushu Electric’s spokesperson said the company’s LNG contract would need to be revised if there was a change in the payment currency.

Another Japanese buyer, Tokyo Gas (9531.T), declined to comment, citing a confidentiality clause in its Sakhalin-2 LNG deal, when asked if the city’s gas supplier had received a request for payment in rubles.

A third buyer, Osaka Gas (9532.T), is gathering information, a spokesperson said.

The companies have long-term contracts with Sakhalin Energy Investment Company, of which Gazprom owns 50%, Shell (SHEL.L) 27.5%, Mitsui 12.5% ​​(8031.T) and Mitsubishi Corp 10% (8058.T) ).

Russia accounts for around 8% of the world’s LNG supply with 40 billion cubic meters of supercooled gas per year coming mainly from Sakhalin-2 and Novatek’s Yamal LNG (NVTK.MM), Russia’s largest LNG plant .

LNG buyers from the Sakhalin-2 facility include Japan’s utilities which lift 60% of production, followed by South Korea’s state Korea Gas Corp (KOGAS) and Taiwan’s CPC.

Russian supplies account for 6% of South Korea’s LNG imports, the KOGAS spokesperson said.

Taiwan’s economy ministry said state refiner CPC’s five-year contract to buy LNG directly from Russia has ended.

The company has already found other sources “so there are no problems with purchasing or settling rubles”, the ministry added. CPC last imported two shipments from Sakhalin and Yamal which were unloaded in June, according to Refinitiv data.

The major long-term LNG buyers from the Yamal facility are China’s CNPC, Gazprom Marketing & Trading, Naturgy, Novatek and TotalEnergies.

The proposal should come as no surprise as the move makes all payments for gas, whether by pipeline or in the form of LNG, chargeable by Gazprom in rubles at its discretion, said Tilak Doshi, managing director of Doshi Consulting.

“It would appear that the Russian ‘gas for roubles’ program was primarily aimed at the European Union and the United States for their unilateral expropriation of Russian foreign exchange reserves, and not at Asian LNG customers, such as South Korea and Japan. , which are major buyers of Russian LNG,” he added.

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Reporting by Joyce Lee in Seoul, Yuka Obayashi in Tokyo and Ben Blanchard in Taipei; Written by Florence Tan; Editing by Michael Perry and Clarence Fernandez

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