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    Finland's Gasum sues Gazprom over ruble payments demand


The country has no emergency gas storage of its own, and would be highly dependent on the 2.6bn m3 Baltic Connector if Russian supply was disrupted.

by: Callum Cyrus

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Natural Gas & LNG News, Europe, Corporate, Import/Export, Contracts and tenders, News By Country, Finland, Russia

Finland's Gasum sues Gazprom over ruble payments demand

Finnish state-owned energy company Gasum plans to take Russia's Gazprom to an arbitration court over the company's demand for payment for gas supplies in rubles.

Gasum said May 17 it has been negotiating a new long-term contract with Gazprom since autumn last year, but received a demand to switch payments from rubles to euros in April. It said the demand is "unacceptable" adding there was a "significant dispute" over other claims in the contract. 

"In this situation, Gasum had no choice but to take the contract to arbitration. In this challenging situation, we will do our utmost to be able to supply our Finnish customers with the energy they need," Gasum CEO Mika Wiljanen said in a statement.

Moscow has demanded gas purchasers in "unfriendly countries" transfer payments to accounts held with Gazprombank, allowing them to be converted into a second ruble account in the buyer's name, and then transferred to Gazprom.

Rumours first emerged last week that Gazprom was on the verge of halting Finland's gas supply, in the wake of Helsinki's request to join NATO over the Ukraine war. Gasum said there was an "increased risk" of interruption to gas transit from Russia to Finland.

Natural gas accounts for around 6% of Finnish energy mix, but most of those supplies come from Russia.

Helsinki's main option to replace Russian gas quantities is the Baltic Connector pipeline, launched in early 2020, which connects Finland with the Baltic gas system. However the capacity is likely to be a limiting factor. Gasum CEO Mika Wiljanen said the 2.6bn m3/yr route could help cover Russian gas transit this summer, while acknowledging the transmission constraints.

Moreover, Finland has no national gas reserve of its own. Instead, it has access to Latvia's Incukalns storage facility, but Riga must juggle Finnish needs with concerns over its domestic energy security. Finland has a proposal for a floating LNG import facility on the table, in partnership with Estonia, but this is unlikely to arrive until later in the year. And any disruption caused by Gazprom shutting off the gas sooner could cause a major operational shock to Finland's key industries.