Russia cut off gas supplies to Finland on Saturday after the country refused to pay

‘We are preparing carefully for this situation’

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HELSINKI – Russia’s Gazprom has told Finland it will cut off natural gas flows from Saturday morning, Gasum said Friday, after Finland’s state-owned gas wholesalers refused to pay its Russian supplier in rubles.

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Gazprom Exports has demanded that European countries pay for the supply of Russian gas in rubles because of sanctions imposed on Moscow’s aggression in Ukraine.

Most supply deals are marked in euros or dollars, and Moscow has already cut off gas supplies to Bulgaria and Poland because they have refused to comply with the new payment terms.

Most of the gas used in Finland comes from Russia, but gas accounts for about 5 percent of its annual energy consumption.

“It is extremely unfortunate that the supply of natural gas will now be cut off under our supply agreement,” Gasum chief executive Mika Wiljanen said in a statement.

“However, we are carefully preparing for this situation and providing that there will be no interruption in the gas transmission network. We will be able to supply gas to all our customers next month,” he said.

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The cut-off is scheduled for May 21, 0400 GMT.

Gassum, who warned on Wednesday that Russian supplies could be cut off, said it would continue to supply gas to Finnish customers from other sources via the Baltic connecting pipeline connecting Finland to Estonia.

Finland said on Friday it had agreed to charter a storage and regasification ship from US-based Accelerate Energy to help replace Russian supplies starting in the fourth quarter of this year.

The ship becomes super-cooled, liquefied natural gas (LNG) which can be re-gasified.

Gazprom Exports, Gazprom’s exporter, confirmed on Friday that it would suspend gas sales for gas from Saturday.

Gazprom Exports says Gasum did not pay under the new Russian rules for a ruble settlement for gas supplies in April.

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It further states that it will protect its interests in arbitration proceedings.

Ahead of Gassum’s announcement, Kremlin spokesman Dmitry Peskov said on Friday that Moscow did not have detailed information about Gazprom’s supply agreement.

“But obviously no one will be provided with anything for free,” he said.

The prospect of losing most of the gas supply has prompted Finnish industry leaders, such as Neste, Metsa and others, to make contingency plans to find alternative energy sources or adapt their production.

Forestry group Stora Enso said it had already replaced Russian natural gas with liquefied natural gas in all its units.

Its peer UPM says it uses gas supplied from Western suppliers via the Baltic connector pipeline but is nonetheless preparing for the possibility of short-term disruption.

Thomson Reuters 2022



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