17 May 2022 14:23

Finland's Gasum refuses to pay for Russian gas in rubles, ready to halt supplies, going to arbitration

MOSCOW. May 17 (Interfax) - Finland's Gasum has not accepted the demand of the Russian party to switch to the new gas payment system in rubles, according to a press release posted on the Finnish company's website.

Consequently, the company warns that there is an increased risk of natural gas supplies being cut off from Russia to Finland.

Gasum notes that it has been preparing for this situation together with customers and the country's authorities. In the summer of 2022, Finland hopes to supply gas from Estonia via the Balticconnector gas pipeline, though capacity constraints via the pipeline could complicate the task.

Balticconnector did not pump gas in April, though it has been continuously transporting fuel to Finland since May 1, according to data from European gas transmission operators.

As noted, Gasum and Gazprom Neft have been discussing amendments to the terms and conditions of the contract since autumn last year. "The companies have serious disagreements on other requirements made under the contract," the Finnish party said.

"Overall, this is something that Gasum cannot accept and has decided to take the disputes regarding the supply contract to arbitration in accordance with the contract. The matter will be considered in arbitration," the company said in the press release.

Russia has been supplying natural gas to Finland for over 45 years. In December 2015, Gazprom Export and Gasum extended the gas supply contract until December 31, 2031.

Finland received 436 million cubic meters of gas from January 1 to March 16, 2022, from Russia, which was about 3.2 million cubic meters per day

Notably, Gazprom was previously a co-owner of Gasum that was established in 1994 by Fortum and Gazprom. Gasum has assumed responsibility for importing and selling gas, as well as for operating and developing the Finnish gas transmission system. In 2016, Gazprom sold its stake and the Finnish government became the sole shareholder of the company.


According to the decree of the Russian president issued on March 31, 2022, the government as of April has introduced a new procedure for paying for Russian gas supplies that stipulates the obligatory conversion of the contract currency into rubles through Gazprombank .

Special ruble and foreign currency type "K" accounts are opened for foreign buyers in Gazprombank, which is the government's authorized financial institution. Regarding the accounts, it is not permitted to suspend operations, seize and/or write off funds when foreign buyers are fulfilling their obligations if said actions are not related to payment under a contract for the supply of natural gas. A foreign buyer pays for the gas in the contract currency, Gazprombank sells the currency on the Moscow Exchange , and then transfers the rubles to Gazprom, at which time the obligation to pay for the natural gas is considered to have been fulfilled.

If the condition is not completed, then deliveries are halted. Further shipment is prohibited if the payment deadline for the contractually supplied gas has arrived and the foreign buyer has not rendered payment, or has rendered it in foreign currency, either not in full, or not to the account in the authorized bank.

Poland and Bulgaria have chosen not to receive Russian gas owing to their respective refusal to accept the terms and conditions of the new settlement system.