Summary
- Finland is the latest country to stop receiving Russian gas
- Gazprom asking for payment in roubles; Finland refuses
- The move comes at the same time as Finland applying to join NATO
Russia’s Gazprom (GAZP.MM) on May 21 suspended gas exports to neighboring Finland, in the most recent aggravation of energy payments, and disputes with Western countries.
Gazprom Export has insisted on European countries paying for Russian gas supplies in roubles due to the sanctions imposed over Moscow’s invasion of Ukraine, but Finland declines to do so. The move by Gazprom comes just as Finland seeks to join the NATO military alliance, a decision prompted by Russia’s invasion of Ukraine.
“Gas imports through Imatra entry point have been stopped,” Finnish gas system operator Gasgrid Finland said in a statement on Saturday.
The point of entry for Russian gas into Finland is in Imatra. On Friday, Finnish state-owned gas wholesaler Gasum said Gazprom had cautioned that flows would be suspended from 0400 GMT on Saturday morning.
Notably, Gazprom and Gasum also confirmed on Saturday that the flows had been cut off. Gasum mentioned in its official statement:
“Natural gas supplies to Finland under Gasum’s supply contract have been cut off. Starting from today, during the upcoming summer season, Gasum will supply natural gas to its customers from other sources through the Balticconnector pipeline.”
Finland is linked to neighboring Estonia’s gas grid through Balticconnector. Gazprom Export on Friday said flows would be stopped as Gasum had not adhered to the new Russian rules that demanded settlements in roubles.
Most of the gas used in Finland is supplied by Russia but gas only makes up about 5% of its annual energy consumption. The majority of European supply contracts are denominated in dollars or euros and Moscow already disconnected gas to Poland and Bulgaria last month after they declined to obey the new payment terms.
The Finnish government, Gasum, and individual gas-consuming companies in Finland have said they were ready for disconnection from Russian flows and that the country will get by without Russian oil. Gasgrid said on Saturday:
“The Finnish gas system is in balance both physically and commercially.”
Finland on May 20 said it had agreed to lease a storage and regasification vessel from U.S.-based Excelerate Energy (EE.N) to help substitute Russian supplies, beginning in the fourth quarter of 2022.
The vessel converts supercooled, liquefied natural gas (LNG), which comes on ships, back into regular gas.
