Denmark’s Orsted warns Russia may cut gas over rouble demand

The Nordic country would be the latest to have its Russian gas supplies severed after Finland, Poland and Bulgaria were all cut off recently.
Image: Bloomberg

Denmark could be the next country cut off from Russian natural gas as its biggest utility is refusing to cave in and make payments in roubles.

Orsted A/S is preparing for Gazprom PJSC to cut off one of Denmark’s biggest sources of the fuel, the firm said in a statement on Monday, adding that it expects it will be able to secure alternative supplies in the European wholesale market. The payment deadline is Tuesday and the company will continue to pay in euros, it said.

“There is a risk that Gazprom Export will stop supplying gas to Orsted,” it said in an emailed statement.

The Nordic country would be the latest to have its Russian gas supplies severed after Finland, Poland and Bulgaria were all cut off recently. European nations are split over how to handle Moscow’s demand that all payments for the fuel should be made in the local currency, and utilities have responded to the challenge differently.

The Danish wind power giant has a long-term contract for 20 terawatt-hours per year with Gazprom that’s set to expire at the end of the decade. That’s about 1.3% of the gas the European Union imported from Russia last year and more than 80% of the 24 terawatt hours of natural gas that Denmark imported last year. Orsted said earlier this year that it planned to buy far less than the maximum allowed by the contract.

Overall, Denmark’s gas imports make up a relatively small portion of European demand that shouldn’t be too difficult to source in the market, according to Stefan Ulrich, an analyst at BloombergNEF.

“You’re really talking about small quantities of gas which really won’t change the European balance all that much,” Ulrich said.

Dutch gas futures for next month, the European benchmark contract, was little changed at 87 euros per megawatt-hour on Monday. They peaked at 345 euros in early March.

Denmark also relies on domestic production, but that’s lower than normal right now as the Tyra field is closed for renovation until June 2023.

Orsted said February 27 that it would stop buying Russian coal and biomass for its power stations. Chief Executive Officer Mads Nipper added though that the firm risked suffering major legal ramifications from terminating its contracts with Gazprom.

© 2022 Bloomberg

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Peoples of Denmark : simple choice : the time is now to decide whether to sacrifice the cost of two barista coffees a day for the principle of Free Ukraine, or to continue to do whatever that little poison dwarf in Moscow wants you to do.
Somewhere along the line please develop a spine.

End of comments.

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