Ørsted insisted it would continue to pay for gas deliveries from Russia in euros and that the payment deadline was May 31st.
“Gazprom Export continues to demand that Ørsted pays for gas supplies in rubles,” the company said in a statement.
“We have no legal obligation under the contract to do so, and we have repeatedly informed Gazprom Export that we will not do so.
“Therefore, there is a risk that Gazprom Export will stop supplying gas to Ørsted. In Ørsted’s view, this will be a breach of contract,” it added.
The company said Russia could not directly cut off gas supplies to Denmark because there is no direct pipeline between the two countries.
This means the country should still be able to secure gas deliveries by
purchasing it from the European market.
“We are backing Ørsted in this decision,” Danish Prime Minister Mette Frederiksen told reporters in Brussels, where she is attending an EU summit. She described the Russian demand as “unacceptable”.
Ørsted also said it was filling up its storage facilities in Denmark and Germany to secure gas supplies to their customers.
Russia says it will only accept payment for natural gas deliveries in its national currency, with buyers required to set up ruble accounts or have their taps turned off.
The measure came in response to a litany of international sanctions on Moscow after it invaded Ukraine on February 24th.
On May 21st, Russia halted supplies to its neighbour Finland — which has angered Moscow by seeking NATO membership — after energy group Gasum also refused to pay in rubles.
Moscow had already cut off Poland and Bulgaria.
And on Monday, the partly state-owned Dutch energy firm GasTerra said Gazprom had informed them that it would cut its gas supplies on Tuesday for the same reason.
In April, Denmark’s government announced plans to rid itself of Russian gas, including moving half of the 400,000 households that are heated with gas to district heating networks or electric heat pumps by 2028.
Gas accounts for 18 percent of energy consumed in Denmark each year.
National production accounted for three quarters of the gas consumed in 2019, with Russia among the main sources of imported natural gas, according to the Danish energy agency.