Russia halts gas flows to Finland over payment dispute

A view shows valves near a drilling platform at a gas processing facility, operated by the Gazprom company, in the Bovanenkovo ​​gas field on Russia’s Yamal Arctic peninsula, May 21, 2019. Picture taken on May 21, 2019. REUTERS/Maxim Shemetov/File photo

OSLO, May 21 (Reuters) – Russia’s Gazprom (GAZP.MM) halted gas exports to neighboring Finland on Saturday, in the latest escalation of a dispute over energy payments with Western nations.

Gazprom Export has demanded that European countries pay for Russian gas supplies in rubles due to sanctions imposed over Moscow’s invasion of Ukraine, but Finland refuses to do so.

Gazprom’s move comes at the same time that Finland is applying to join the NATO military alliance, a decision prompted by Russia’s invasion of Ukraine. read more

“Gas imports through the Imatra entry point have been stopped,” Finnish gas system operator Gasgrid Finland said in a statement on Saturday.

Imatra is the entry point for Russian gas to Finland.

Finnish state gas wholesaler Gasum said on Friday that Gazprom had warned that flows would stop from 0400 GMT on Saturday morning. read more

Gasum and Gazprom also confirmed on Saturday that the flows had stopped.

“Supply of natural gas to Finland under the Gasum supply contract has been cut off,” Gasum said in a statement.

“Starting today, during the upcoming summer season, Gasum will supply natural gas to its customers from other sources through the Balticconnector pipeline.”

Balticconnector connects Finland with the gas network of neighboring Estonia.

Gazprom Export said on Friday that flows would be reduced because Gasum had not complied with new Russian rules requiring settlement in rubles.

Most of the gas used in Finland comes from Russia, but gas only accounts for around 5% of its annual energy consumption. read more

Most European supply contracts are denominated in euros or dollars, and Moscow already cut off gas supplies to Bulgaria and Poland last month after they refused to meet new payment terms. read more

Gasum, the Finnish government and individual gas consuming companies in Finland have said they were prepared for a shutdown of Russian flows and that the country will do without it.

“The Finnish gas system is in balance both physically and commercially,” Gasgrid said on Saturday.

Finland said on Friday it had agreed to lease a storage and regasification vessel from US-based Excelerate Energy (EE.N) to help replace Russian supplies, starting in the fourth quarter of this year. read more

The vessel converts supercooled liquefied natural gas (LNG), which arrives on ships, back into normal gas.

Edited by Gwladys Fouche; edited by david evans

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