Following Russia’s February 24 special military operation in Ukraine, Moscow asked clients from “unfriendly countries” to pay for gas in roubles, a way to sidestep sanctions.
On Saturday, Russia’s Gazprom halted gas exports to neighbouring Finland, the latest escalation of an energy payment dispute with Western nations.
Gazprom Export has demanded that European countries pay for Russian gas supplies in roubles because of sanctions imposed over Moscow’s special military operation in Ukraine. But Finland refused to do so.
“Gas imports through Imatra entry point have been stopped,” Gasgrid Finland said in a statement on Saturday. Imatra is the entry point for Russian gas into Finland.
Finnish state-owned gas wholesaler Gasum last Friday said Gazprom had warned flows would be halted from 04:00 GMT on Saturday.
Gasum also confirmed flows had stopped.
“Natural gas supplies to Finland under Gasum’s supply contract have been cut off,” it said in a statement.
“Starting from today, during the upcoming summer season, Gasum will supply natural gas to its customers from other sources through the Balticconnector pipeline.”
Balticconnector links Finland to neighbouring Estonia’s gas grid.
Gazprom Export last Friday said flows would be severed because Gasum had not complied with the new Russian rules requiring settlement in roubles.
The majority of gas used in Finland comes from Russia but gas only accounts for about five percent of its annual energy consumption.
Most European supply contracts are denominated in euros or dollars and Moscow halted gas sales to Bulgaria and Poland last month after they refused to comply with the new payment terms.
Gasum, the Finnish government and individual gas-consuming companies in Finland have said they were prepared for a shutdown of Russian flows and the country will manage without.
“The Finnish gas system is in balance both physically and commercially,” Gasgrid said on Saturday. Finland last Friday said it agreed to charter a storage and regasification vessel from US-based Excelerate Energy to help replace Russian supplies, starting in the fourth quarter this year.
The vessel turns supercooled, liquefied natural gas (LNG), which arrives on ships, back into regular gas. Following Russia’s February 24 invasion of Ukraine, Moscow has asked clients from “unfriendly countries” — including EU member states — to pay for gas in roubles, a way to sidestep Western financial sanctions against its central bank.
Finland, along with neighbouring Sweden, this week broke its historical military non-alignment and applied for NATO membership, after public and political support for the alliance soared following Russia’s invasion of Ukraine.
Moscow has warned Finland that any NATO membership application would be “a grave mistake with far-reaching consequences”. — Aljzeera