Gazprom has asked India's largest gas transmitter GAIL (India) to pay for gas imports in euros instead of dollars, two sources said, in a sign the Russian energy giant seeks to wean itself away from the U.S. currency in the wake of the Ukraine conflict.
European countries and the United States have imposed heavy sanctions on Russia since Moscow sent troops into Ukraine on Feb. 24.
GAIL has a long-term gas import deal with Gazprom Marketing & Trading Singapore to annually buy 2.5 million tonnes of liquefied natural gas and has been settling trade with Gazprom in dollars.
GAIL, which imports and distributes gas, also operates India's largest gas pipeline network.
Last week, Gazprom wrote to GAIL requesting that the company settle payments for gas purchases in euros instead of dollars, the sources familiar with the matter said, adding the state-run Indian firm is still examining the request.
"GAIL doesn't see any problem in settling payment in euros as European countries are paying for their imports in euros," said one of the sources.
The sources said that sanctions might not hit payments in euros because GAIL's contract is with a Singapore unit of Gazprom.
Gazprom and GAIL did not respond to Reuters' emails seeking comment.
Western sanctions have dealt a crippling blow to Russia's economy, but the European Union, which relies on Russian oil and gas, has stopped short of placing curbs on energy imports and continues to pay in euros.
President Vladimir Putin said on Wednesday that Russia, the world's largest gas producer, will soon require "unfriendly" countries to pay for fuel in roubles.
India, however, has refrained from outright condemnation of Russia, although it has called for an end to violence in Ukraine, and it has not banned Russian oil and gas imports, unlike several Western countries.
In fact, Indian companies are snapping up Russian oil as it is available at a deep discount after some companies and countries shunned purchases from Moscow.
The sources said that so far Gazprom is supplying the volumes committed to under its contract with GAIL.
The sources declined to be named as they are not authorised to speak to the media.