German power company Uniper to pay for Russian gas in rubles

German power company Uniper, one of Germany's largest gas importers, will pay for Russian gas deliveries in rubles in accordance with a new payment procedure initiated by Russia last month.

The procedure calls for buyers of Russian gas from ‘unfriendly’ countries to submit payment in rubles—a move aimed at propping up the Russian currency after the country’s billions of dollars of foreign currency reserves were frozen by Western allies.

Gazprom on Apr. 27 notified Poland and Bulgaria that it would suspend supplies of Russian gas to the two European countries following their refusal to pay in rubles.

Uniper’s action is counter to the European Commission's call on EU energy buyers not to buy Russian gas in rubles. Uniper said it had no choice but said it was still complying with EU sanctions. "We believe that payment conversion is possible in line with sanctions laws and Russian statutes," a Uniper spokesman said.

Uniper will transfer payments in euros into an account at Gazprombank, which would convert payments into rubles.