G7 rejects Russia’s demand to pay for gas in rubles

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Updated 28 March 2022
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G7 rejects Russia’s demand to pay for gas in rubles

  • Concerns over security of supply were enhanced after the demand, with companies and EU nations scrambling to understand the ramifications

BERLIN: The Group of Seven major economies have agreed to reject Moscow’s demand to pay for Russian natural gas exports in rubles, the German energy minister said Monday.


Robert Habeck told reporters that “all G-7 ministers agreed completely that this (would be) a one-sided and clear breach of the existing contracts.”

He said officials from France, Germany, Italy, Japan, the United States, the United Kingdom and Canada met Friday to coordinate their position and that European Union representatives also were present.


Habeck said that “payment in ruble is not acceptable and we will urge the companies affected not to follow (Russian President Vladimir) Putin’s demand.”


Putin announced last week that Russia will demand “unfriendly” countries pay for natural gas only in Russian currency from now on. He instructed the country’s central bank to work out a procedure for natural gas buyers to acquire rubles in Russia.


Economists said the move appeared designed to try to support the ruble, which has collapsed against other currencies since Putin invaded Ukraine on Feb. 24 and Western countries responded with far-reaching sanctions against Moscow. But some analysts expressed doubt that it would work.


Asked by reporters earlier Monday if Russia could cut natural gas supplies to European customers if they reject the demand to pay in rubles, Kremlin spokesman Dmitry Peskov said in a conference call that “we clearly aren’t going to supply gas for free.”


“In our situation, it’s hardly possible and feasible to engage in charity for Europe,” Peskov said.


Asked what happens if Russia turns off the taps now, Germany’s energy minister said, “We are prepared for all scenarios.”


“Putin’s demand to convert the contracts to ruble (means) he is standing with his back to the wall in that regard, otherwise he wouldn’t have made that demand,” Habeck said, adding that Russia needs rubles to finance its war at home, such as payments to troops.

 

Russia is working out methods for accepting payments for its gas exports in roubles and it will take decisions in due course should European countries refuse to pay in the Russian currency, the Kremlin said on Monday.

The Russian central bank, the government and Gazprom , which accounts for 40 percent of European gas imports, should present their proposals for rouble gas payments to President Vladimir Putin by March 31.


Poland’s PGNiG, which has a contract with Gazprom until the end of the year, has also said it cannot simply switch to paying in roubles.


The EU aims to cut its dependency on Russian gas by two-thirds this year and end Russian fossil fuel imports by 2027.


On Friday, the United States said it will work to supply 15 billion cubic meters of liquefied natural gas (LNG) to the European Union this year.


US LNG plants are producing at full capacity and analysts say most of any additional US gas sent to Europe would have to come from exports that would have gone elsewhere.


Russian gas exports to the EU were at around 155 bcm last year.

(With Reuters)


From barrels to bytes: How AI is powering Saudi Arabia’s industrial transformation

Updated 53 min 25 sec ago
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From barrels to bytes: How AI is powering Saudi Arabia’s industrial transformation

  • Inside the Kingdom’s drive to merge energy expertise with digital intelligence

RIYADH: Artificial intelligence is moving beyond concept to become a cornerstone of Saudi Arabia’s energy sector, reshaping how oil, gas, and power systems are managed and optimized.

Industry giants like Saudi Aramco are embedding smart systems into their operations to boost efficiency, reliability, and sustainability—key pillars in the Kingdom’s efforts to modernize its industrial base and diversify its economy.

According to the International Energy Agency, oil and gas companies were among the first to adopt digital technologies. The agency estimates that applying AI to power plant operations and maintenance could save up to $110 billion annually by 2035 through reduced fuel consumption and maintenance costs.

For Saudi Arabia, this technological momentum offers both a blueprint and an opportunity. Under Vision 2030, integrating data and intelligent automation is transforming how energy is explored, refined, and delivered.

At the heart of Saudi Aramco’s operations is a digital transformation strategy centered on artificial intelligence, big data, and the industrial Internet of Things. These technologies are applied at every stage of production—from mapping reservoirs and optimizing drilling to improving efficiency and safety.

AI also underpins Aramco’s Digital Transformation Program, which develops in-house smart tools and data-driven platforms designed to cut emissions, reduce costs, and enhance performance while ensuring a reliable energy supply.

A prime example is the Upstream Innovation Center, where engineers have implemented AI solutions that reduce fuel gas use in boilers, improve efficiency, and detect potential leaks through fiber-optic monitoring. At the Khurais oil field, more than 40,000 sensors monitor approximately 500 wells via an Advanced Process Control system—the first of its kind for a conventional oil field at Aramco. Digitization at Khurais has increased production by around 15 percent, doubled troubleshooting speed, and lowered both costs and environmental impact.

These advances illustrate how Aramco’s network is evolving into a connected, adaptive model, blending traditional engineering expertise with digital intelligence.

DID YOU KNOW?

• AI could save up to $110 billion a year in global power plant fuel and maintenance costs by 2035.

• Advanced Process Control enables real-time monitoring of hundreds of oil wells in the Kingdom.

• AI-powered simulations now replace weeks of manual analysis, enabling faster operational decisions.

As Saudi Arabia develops an AI-driven energy economy, the King Abdullah University of Science and Technology is bridging the gap between digital innovation and industrial application. 

Bernard Ghanem, chair of the Center of Excellence for Generative AI, said the university is working with Saudi Aramco to develop AI systems that predict the chemical properties of materials and accelerate research into direct air capture technologies for carbon dioxide removal.

He told Arab News that KAUST is partnering with SABIC and ACWA Power to apply AI in process optimization and materials discovery, turning lab-scale research into practical solutions for the energy sector.

Ghanem said KAUST’s generative AI materials program combines a robotic chemistry lab with its AI Chemist foundation model, a system that accelerates the development of catalysts, battery materials, and membranes for clean energy applications.

“This is our lab of the future, automating experimentation and speeding up energy innovation,” he said.

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Mani Sarathy, professor of chemical engineering at KAUST, noted that AI-based reinforcement learning tools are already improving efficiency in hydrocarbon refineries by enhancing simulations and shortening analysis cycles.

“AI is helping energy companies run complex simulations that once took weeks, enabling faster and more precise operational decisions,” he told Arab News.

Sarathy added that the next phase will combine automation with expert oversight. Hybrid human-AI control systems, he explained, are likely to become standard in critical operations, balancing digital autonomy with safety and reliability as Saudi industries expand AI deployment.

These efforts highlight KAUST’s growing role in transforming AI from an academic discipline into a driver of industrial innovation in Saudi Arabia’s energy sector under Vision 2030.

Meanwhile, Skeleton Technologies is bringing AI-driven energy storage solutions to Saudi partners, solutions that are already reshaping industrial systems across Europe and beyond. In Europe, the company combines artificial intelligence and advanced materials to reduce energy use and improve efficiency in data centers, electricity grids, and defense systems.

“Our solutions allow AI infrastructure to consume less electricity and reduce grid connection needs, making AI operations more energy efficient,” Arnaud Castaignet, vice president of government affairs and strategic partnerships at Skeleton, told Arab News.

Inside its factories, Skeleton uses AI-driven digital twin models, created with Siemens Digital Industries, to simulate production, optimize operations, and enable predictive maintenance, Castaignet said. At the core of its technology is curved graphene, a proprietary carbon material that gives Skeleton’s supercapacitors exceptional conductivity.

“It allows our supercapacitors to charge and discharge within microseconds, around 12 microseconds, something batteries cannot do,” Castaignet said.

The company’s flagship Graphene GPU system, built on these supercapacitors, cuts energy use in AI data centers by up to 40 percent and reduces grid requirements by 45 percent while boosting computing performance. The devices are free of lithium, nickel, and cobalt, relying instead on graphene derived from silicon carbide—essentially sand—processed entirely in Germany.

“To build sustainable AI infrastructure, you need energy-saving hardware as well as renewable power,” Castaignet added. “Our Graphene GPU shows both can work together.”

As Saudi Arabia continues linking engineering expertise with digital intelligence, its industrial progress is measured not only in barrels of oil but also in bytes, data, and the smart systems shaping its energy future.