Russia to cut gas to Finland after being warned of ‘grave mistake’

Russian supply of natural gas to Finland will be cut off on Saturday morning, Finnish state-owned energy company Gasum said Friday, after the Nordic country refused to pay supplier Gazprom in rubles.

“It is highly regrettable that natural gas supplies under our supply contract will now be halted,” Gasum CEO Mika Wiljanen said in a statement.

“However, we have been carefully preparing for this situation” and “there will be no disruptions in the gas transmission network,” Wiljanen said.

The supply contract will end on Saturday at 7am local time (2pm AEST), Gasum said.

In April, Gazprom Export demanded that future payments in the supply contract be made in rubles instead of euros, but Gasum rejected the demand and announced on Tuesday it was “taking the issue to arbitration.

The demand for payments in rubles came after Western countires placed sanctions on Russian companies in response to Moscow’s invasion of Ukraine. The EU has branded the currently demand “blackmail”.

Queried about the matter, Kremlin spokesman Dmitry Peskov on Friday referred reporters to Gazprom for “details” but said that “it is obvious that nobody is going to deliver anything for free”.

Natural gas accounts for about eight per cent of Finland’s energy consumption, most of which comes from Russia.

In efforts to mitigate the risks of relying on Russian energy exports, the Finnish government earlier on Friday announced that the country had signed a 10-year lease agreement for an LNG (liquefied natural gas) terminal ship with US-based Excelerate Energy.
 

“The LNG terminal will make it possible for us to break free from Russian gas,” Finance Minister Annika Saarikko told reporters.

On Sunday, Russia suspended electricity supplies to Finland overnight after its energy firm RAO Nordic claimed payment arrears, although the shortfall was quickly replaced.

Finland, along with neighbouring Sweden, this week broke its historical military non-alignment and applied for NATO membership, after public and political support for the alliance soared following Russia’s invasion of Ukraine.

Moscow has repeatedly warned Finland that any NATO membership application would be “a grave mistake with far-reaching consequences”.

One of Russia’s motives for invading Ukraine was over its ambitions to join NATO and increase its ties with the EU.

Finland and Russia share a land border and it is feared Moscow could move to place weapons near the frontier if Helsinki’s bid to join NATO is approved.

The move could be scuppered, however, as NATO member Turkey has already voiced its disapproval of Finland and Sweden joining the bloc.