For the first time Gazprom sells gas to western Europe in rubles

Gazprom Export, Gazprom’s exporter company, completed its first ever sale of natural gas priced in rubles to a western European company, Gazprom Export announced late Thursday.

The company, which traditionally sells gas to European buyers in U.S. dollars or euros, sold 80 million cubic meters of gas on the Electronic Sales Platform (ESP) in the Russian currency to be delivered to NetConnect Germany (NCG) Virtual Trading Point. “For the first time in Gazprom Export’s history, a western European company buys gas and pays in rubles for it,” Elena Burmistrova, director general of Gazprom Export, said, adding that the company plans to further develop sales in rubles through the Russian ESP.

The ESP is designed to physically sell natural gas to European consumers, in addition to supplies under existing contracts. When gas sales started through the platform in September 2018, the company sold about 3 billion cubic meters of gas having signed contracts with more than 20 clients.

This transaction is part of the Russian authorities’ aim to reduce the use of the dollar in trade due to sanctions imposed by the U.S. and a large number of western countries. On Oct. 3, 2018, Russian Economic Development Minister Maxim Oreshkin said the ministry with the country’s finance ministry and the central bank jointly drafted their proposals on the “de-dollarization” of the country’s economy.

In a report published on Jan. 9, Russia’s central bank revealed that in the second quarter of 2018, it had dumped $101 billion from its reserves by shifting trade via euro and yuan.