Gazprom stops gas supply to Finland

Since Saturday, May 21, Gazprom has stopped the supply of gas to Finland due to the refusal of the Finnish company Gasum to pay in rubles, as Moscow wanted. This was reported by the press service of the Russian company.

“As of the end of the working day 20 May, Gazprom Export had not received payment for gas supply from Gasum (Finland) in April, in accordance with the Decree of the President of the Russian Federation No. 172 of March 31, 2022.” says report.

Last year, Gazprom Export supplied Gasum with 1.49 billion cubic meters of gas, two-thirds of the total consumption in Finland.

The end of supplies was known before a Gasum message – the Finns announced that they will receive gas from the Baltic states in the summer, and it will be delivered via the Balticconnector pipeline.

The Russia-Finland gas supply contract was valid until the end of 2031. Supply volumes decreased by 34.5% in 2020, but reached 1.035 billion cubic meters in the first half of 2021, 35.6% more than in the same period before.

Bloomberg previously reported that Finland purchased 92% of its natural gas from Russia in 2021. But this fuel source provides only 5% of the country’s energy.

Finnish authorities announced their intention to phase out Russian gas in April.

“The goal is to get rid of all payments to Russia so we don’t use them to finance Putin’s military funding. “We are not asked to find ourselves in a situation where we have to pay for breach of contract,” said Titti Tuppurainen, then Minister of European Affairs and Corporate Governance.

Finnish gas operator Gasgrid Finland, in turn, reported that gas supply from Imatra in Karelia was stopped on May 21, and all the volume needed by the country was imported through the Balticconnector.

Gasum said they refused to pay for gas in rubles, while there were other “significant disagreements” over other requirements of the contract. The Finnish gas men added that Gasum “had no choice but to submit the contract to arbitration”.

In turn, Gazprom has already warned that it will “defend its interests in arbitration proceedings by the means available”.

It’s worth adding that in mid-May, Bloomberg announced its intention to charter a floating tanker with Gasgrid Finland’s liquefied natural gas (LNG) terminal. According to the Finns, this will stop gas imports from Russia.

Steven Cobos, chairman of the American company Excelerate Energy, which owns the tanker, reported that the ship has a carrying capacity of 5 billion cubic meters per year, although Finland and Estonia together need only 3 billion cubic meters per year. As a result, the deal was signed and soon the floating LNG terminal will go across the Atlantic to the Finnish coast.

At the end of March, Russian President Vladimir Putin signed a decree on gas trade with unfriendly countries (this list includes all EU countries), forcing these states to pay for energy resources in rubles. The statement caused a different reaction – some countries refuse in principle. At the same time, on May 16, Bloomberg reported that the Italian energy company Eni plans to meet the requirements of Russia and open a bank account in rubles.