Russian energy giant Gazprom said on Tuesday that it will completely suspend gas supplies to French industrial energy group Engie this week due to a contract dispute, amid concerns of a potential energy crisis in Europe this winter.
In a statement on its official Telegram channel, Gazprom said: “At the close of the business day on August 30, Gazprom Export did not receive full payment for gas supplied to Engie (France) in July under the existing contracts.”
The Gazprom statement added that Russian law prohibits the country’s natural gas suppliers to supply further deliveries of gas to foreign buyers if payment has not been made in full by the buyer within the contractual term.
Gazprom added that it has notified Engie of a complete suspension of gas deliveries beginning September 1 until full payment for the gas supplied has been received.
The announcement came just hours after Gazprom said it would reduce its supply of gas to France.
The decrease in supply is “due to a disagreement between the parties on the application of contracts,” Engie said in a statement earlier Tuesday.
“This reduction is the logical continuation of the actions of Gazprom for several months, which does not respect its contracts, and which reduces its supplies to most of its customers,” a source inside the cabinet of the French energy ministry told CNN, adding that Gazprom’s actions did not compromise the security of France’s supply.
Engie also said a Gazprom reduction would not affect supply.
The company had “already secured the necessary volumes to ensure the supply of its customers and of its own needs” and it has implemented a series of “measures to significantly reduce the direct financial and physical impacts that could result from an interruption of gas deliveries by Gazprom,” it said.
Engie did not respond immediately to CNN’s request for comment on the complete suspension.
Pierre Bairin and Renée Bertini in Paris contributed reporting.