Home NewsCommodities News Russia stops gas flows to Finland over payments dispute By Reuters

Russia stops gas flows to Finland over payments dispute By Reuters

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Russia stops gas flows to Finland over payments dispute By Reuters

© Reuters. FILE PHOTO: A view near a drilling rig at a natural gas processing facility operated by Gazprom is shown at the Bovanenkovo ​​gas field on the Yamal Peninsula in Russia’s Arctic on May 21, 2019. Photo taken on May 21, 2019. REUTERS/Maxim Shemetov/File photo

Taylor Solswick

OSLO (Reuters) – Gazprom (MCX: ) on Saturday stopped gas exports to neighboring Finland, the latest escalation in a dispute with the West over energy payments.

Gazprom exports asked European countries to pay in rubles for Russian gas supplies due to sanctions over Moscow’s invasion of Ukraine, but Finland refused to do so.

Gazprom’s move comes at the same time as Finland’s application to join the NATO military alliance, a decision triggered by Russia’s invasion of Ukraine.

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

Imatra is the entry point for Russian gas into Finland.

Finland’s state-owned gas wholesaler Gasum said on Friday that Gazprom had warned it would stop supply from 0400 GMT on Saturday morning.

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

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

“Starting today, Gasum will be supplied to customers from other sources via the Balticconnector pipeline over the coming summer.”

The Balticconnector connects Finland to neighboring Estonia’s gas grid.

Gazprom Export said on Friday that it would cut traffic because Gasum did not comply with new Russian rules requiring settlement in rubles.

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

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

Gasum, the Finnish government and individual gas consuming companies in Finland said they were ready to shut down gas supplies to Russia, which the country would manage without shutting down.

“Finland’s natural gas system is in physical and commercial equilibrium,” Gasgrid said Saturday.

Finland said on Friday it had agreed to charter a storage and regasification vessel from U.S. Excelerate Energy starting in the fourth quarter of this year to help replace Russian supplies.

The vessel converts the supercooled liquefied natural gas (LNG) arriving on board back to conventional gas.

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