LNG Sakhalin-2: Russia asks buyers to pay Gazprombank in dollar

- Advertisement -

Russia has asked customers of the Sakhalin-2 liquefied natural gas (LNG) plant to pay for the quantities of LNG they supply to Gazprombank, putting them, including Japan and South Korea, in a quandary over the risk of sanctions, it said the Bloomberg agency.

Sakhalin Energy LLC, the new administrator, sent settlement instructions to customers to pay in US dollars to Gazprombank, according to documents seen by Bloomberg. It is noted that Gazprom owns just over 50% of Sakhalin Energy.

- Advertisement -

The move is yet another attempt by Russia to consolidate control of its energy assets, as Russian President Vladimir Putin also curbs flows to Russia’s biggest markets in Europe, leading to accusations of using energy as a “weapon”.

The majority of LNG shipments from Sakhalin-2 are headed to Japan, which relies on the facility for a stable energy supply. South Korea and Taiwan also import from Sakhalin-2.

- Advertisement -

Payments were previously made to non-Russian banks. Payments to Sakhalin were made through the Bank of New York Mellon Corp., which acted as a U.S. correspondent bank, according to documents dated Aug. 16. The use of an American bank as an intermediary served to avoid potential sanctions.

At least two LNG buyers are checking with their legal teams whether they can make payments to Gazprombank without violating sanctions, according to people with knowledge of the matter. Sakhalin Energy also provided the option for payments through the Moscow-based branch of Raiffeisenbank AO, but there is a preference for Gazprombank, said the sources, who spoke on condition of anonymity.

Sakhalin Energy, Gazprombank and Raiffeisenbank’s Russian branch did not immediately respond to Bloomberg requests for comment. Bank of New York Mellon also did not respond.

It is noted that Moscow ordered the creation of a new Russian operator for Sakhalin-2 in early August. The order came after Putin’s decree on June 30 required the project’s operator to be transferred from Bermuda to a new Russian entity, citing risks to the country’s interests and financial security.

Sakhalin last week asked its customers to sign LNG purchase agreements with revisions to name, address and bank, Bloomberg reported.

It is recalled that earlier this year Russia imposed new payment terms on European gas importers through pipelines, which included opening a ruble account and a foreign currency account at Gazprombank. The request initially divided European states over fears of violating sanctions, but eventually most gas importers found a way to comply.

Source: Capital

- Advertisement -

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Hot Topics

Related Articles