May 25 -- Russia will cut off natural gas supplies to Finland after the country rejected President Vladimir Putin's request to pay in rubles, Finland's state-owned energy company Gasum said on May 20. The cutoff comes the same week that Finland applied to join the North Atlantic Treaty Organization (NATO) and marks the latest escalation in Europe's energy problems amid the Ukraine war.
On the afternoon of Friday, May 20, Gazprom Export informed Gasum that natural gas supplies to Finland under Gasum’s supply contract will be cut on the Saturday morning, May 21, 2022.
Beginning May 21, and during the upcoming summer season, Gasum will supply natural gas to its customers from other sources through the 2.6-bcmy Balticconnector pipeline, the company said. Gasum’s gas filling stations in the gas network area will continue in normal operation, it continued.
Finland also has agreed a 10-year charter for a floating storage and regasification (FSRU) vessel with US-based Excelerate Energy to help replace Russian gas supply, finance minister Annika Saarikko said on May 20.
“It is highly regrettable that natural gas supplies under our supply contract will now be halted. However, we have been carefully preparing for this situation and provided that there will be no disruptions in the gas transmission network, we will be able to supply all our customers with gas in the coming months,” said Mika Wiljanen, Gasum’s chief executive officer.
At end March, Putin declared that “unfriendly foreign buyers” must pay Russian gas in rubles. The buyers need to open two accounts in Gazprombank, one to pay in euros and dollars as specified in contracts and another in rubles. The buyers will authorize the bank to sell that foreign currency for rubles, which are placed in the second account, where the gas is formally purchased.
Finland is the third European country to lose gas from Russia. Poland and Bulgaria, which were cut off Russia gas supplies at end April after refusing to pay in rubles, are getting supplies from other countries. Italian energy company Eni said this week that it was "initiating procedures" to open accounts in euros and rubles.