Deliveries to stop if price cap is introduced on Russian gas in Europe - Gazprom's Miller

MOSCOW. Oct 17 (Interfax) - Deliveries will be stopped if an attempt is made to introduce a price cap on Russian gas in Europe, Gazprom CEO Alexei Miller said in an interview with Pavel Zarubin, the host of the "Moscow. Kremlin. Putin" program aired on the Rossiya 1 (VGTRK) television channel.

"We are guided by the contracts that have been signed. A unilateral decision like this one is of course a violation of the existing terms of the contract that will entail a stop to deliveries," Miller said.

A mechanism of protection, including from such price caps, is envisaged in the Russian president's March 2022 executive order "On a Special Procedure of the Fulfillment of Obligations to Russian Natural Gas Suppliers by Foreign Buyers".

The document established that payments for Russian gas supplied through pipelines after April 1, 2022, to counterparties named by the order be provided exclusively in rubles. For that purpose, the designated financial institution, Gazprombank opens K-type ruble and foreign currency accounts for foreign buyers. A foreign buyer pays for gas in the currency prescribed by the contract, Gazprombank sells the currency at the Moscow Exchange and transfers the rubles to Gazprom. As this is done, the obligation to pay for gas supply is deemed to be fulfilled.

"Further gas supply is prohibited unless the payment for gas delivered under a contract is due and a foreign buyer either does not pay for gas in a foreign currency, and (or) a payment is incomplete, and (or) a payment is not made to an account in the designated bank," according to the document.