GAZPROM share gains: Russia stops supplying gas to Finland – dispute over ruble payments

The Russian state-owned company GAZPROM stated that the Finnish utility Gasum did not settle its payments in rubles – as requested by President Vladimir Putin. According to GAZPROM data, Finland received two-thirds of its gas from Russia last year. That was a total of 1.49 billion cubic meters of gas.

According to Finnish Radio, gas makes up about five percent of the energy mix in Finland. According to Gasum, it was the only energy company in Finland to buy gas directly from Russia.

Relations between Russia and Finland are also strained because the neighbor wants to join NATO, much to Moscow’s annoyance. Like Sweden, Finland is seeking NATO protection after the Russian invasion of Ukraine.

At the end of April, Russia had already turned off the gas supply to Poland and Bulgaria because they do not pay in rubles. According to the Federal Ministry of Economics and the Federal Network Agency, the delivery stop for Finland has no impact on the gas supply in Germany.

The Finnish company in Espoo also informed on Saturday about the suspension of deliveries. As of now and during the summer season, Gasum will supply gas from other sources to customers via the Balticconnector pipeline, the statement said. The network continues to function normally.

Gasum and GAZPROM had already announced on Friday that deliveries would be discontinued. This, in turn, was preceded by a statement from the Finnish concern that GAZPROM Export’s demand for payments to be made in rubles would not be accepted. The two companies also disagree on other demands. The dispute should be resolved through legal channels.

“But we have carefully prepared for this situation, and if there are no disruptions in the gas network, we will be able to supply all of our customers with gas in the coming months,” said Gasum boss Mika Wiljanen on Friday.

Kremlin chief Putin introduced the new payment system in response to Western sanctions in the wake of Russia’s war of aggression against Ukraine. The procedure stipulates that customers open an account with the Russian GAZPROMbank. There they can continue to pay their bills in euros or dollars, the bank converts the money and transfers it to GAZPROM. According to the Russian leadership, about half of the gas customers in the EU have followed the new system so far, including in Germany.

GAZPROM shares temporarily gained 1.16 percent on Monday on the Moscow stock exchange to reach 266.04 rubles.

MOSCOW/ESPOO (dpa-AFX)

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