Russia’s major gas bank rejected payment in rubles from a trading firm that Germany seized from Moscow’s control, the first sign of friction following the take-over amid a broader regional energy dispute.

Gazprombank declined payment for some April and May gas deliveries to Germany and Austria under contract with Gazprom Marketing & Trading Ltd., even as the company sought to pay for the fuel using a rubles account as Russia has demanded, according to people familiar with the matter.

GM&T was previously under the direction of Russian-state gas producer Gazprom PJSC’s German subsidiary. Germany took over the unit earlier this month to secure the country’s gas supplies, and it now risks being shunned under its new ownership.

The European Union and Russia have been in a standoff over gas supplies, with President Vladimir Putin demanding payment in rubles. Under the decree, buyers would set up two accounts with Gazprombank, which would then convert euro payments in one account to rubles in the other.

The EU has suggested that payment can still be made in euros, or else buyers risk running afoul of sanctions on Moscow following its invasion of Ukraine. Russia, the bloc’s top supplier, on Wednesday cut shipments to Poland and Bulgaria over the payment dispute.

While the GM&T case deals with a very small amount of gas — a fraction of a percent of Europe’s total imports from Russia — it highlights complications with the Kremlin’s payment order.

source yahoo.com via Bloomberg

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