Gazprom to switch to yuan, roubles for gas supplies to China

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Gazprom to switch to yuan, roubles for gas supplies to China

Russia s Gazprom said on Tuesday it had signed an agreement to switch payments for gas supplies to China to yuan and roubles instead of dollars.

The move is part of a push by Russia to reduce its dependence on the U.S. dollar, euro and other hard currency in its banking system and for trade - a drive that Moscow has accelerated since it was hit with Western sanctions in response to its invasion of Ukraine.

Russia is working on closer economic ties with China and other non-Western countries, in particular as new markets for its vital hydrocarbon exports.

Gazprom CEO Alexei Miller said that allowing for payments in Russian roubles and Chinese yuan was mutually beneficial for both Gazprom and Beijing's state-owned China National Petroleum Corporation.

He said it would be an excellent example for other companies, and will give an additional impetus for the development of our economies.

Gazprom didn't say anything about the scheme or when payments would switch from dollars to roubles and yuan.

President Vladimir Putin ordered European customers to open rouble bank accounts with Gazprombank and pay in Russian currency if they wanted to continue receiving Russian gas. Some companies and countries that refused to the terms of the deal were cut off supplies.

Russia signed a $37.5 billion extension to its deal to supply gas to China on the eve of the invasion.

In late 2019, it started pumping gas through the 3,000 km 1,865 mile Power of Siberia gas pipeline to China. Putin praised the move as a genuinely historical event, not only for the global energy market, but above all for Russia and China.