Russia cutting off natural gas to Denmark, company says

COPENHAGEN: Denmark's largest energy company said Russia is cutting off its gas supply as of Wednesday because it refused to pay in rubles, the latest escalation over European energy amid the war in Ukraine.

Russia previously halted natural gas supplies to Finland, Poland and Bulgaria for refusing a demand to pay in rubles. And on Tuesday, the tap was turned off to the Netherlands.

Danish energy company Orsted said it still expected to be able to serve its customers. "We stand firm in our refusal to pay in rubles, and we've been preparing for this scenario," Orsted CEO Mads Nipper said. "The situation underpins the need of the EU becoming independent of Russian gas by accelerating the build-out of renewable energy."

Russian President Vladimir Putin declared in the wake of Western sanctions that "unfriendly foreign buyers" needed to open two accounts with state-owned Gazprombank, one to pay in euros and dollars as specified in contracts and another in rubles.

The Danish Energy Agency said that in the first 18 weeks of 2022, Russian gas amounted to approximately 25% of EU gas consumption.

The agency said that Denmark losing its supply would not have immediate consequences. "We still have gas in Denmark, and consumers can still have gas delivered," Kristoffer Bottzauw, head of the Danish Energy Agency said in a statement Monday.

"But we have plans ready if the situation worsens. Since there is no pipeline going directly from Russia to Denmark, Russia will not be able to directly cut off gas supplies to Denmark, which still will be able to get it," Orsted said.

Russia's move means that Denmark must purchase more gas on the European gas market, the company added.

Denmark has been a net exporter of natural gas for many years, but because its Tyra field in the North Sea is being renovated, the country currently imports about 75% of its gas consumption via Germany. The Tyra field is expected to reopen in mid-2023.

In Denmark, some 380,000 households use natural gas for heating via gas boilers, the agency said. On Tuesday, the leaders of the European Union agreed to cut around 90% of all Russian oil imports over the next six months. The 27-nation bloc has relied on Russia for 25% of its crude and 40% of its natural gas.