May 20, 2022 - World

Russia to halt gas exports to Finland, energy provider says

A Gasum plant in Raikkola, Imatra, Finland, in May.

A Gasum plant in Raikkola, Imatra, Finland, in May. Photo: Vesa Moilanen/Lehtikuva/AFP via Getty Images

Finland's state-owned energy company warned Friday that Russia will halt natural gas exports to the country on Saturday after it refused to make payments in rubles, as the Kremlin demanded in March.

Why it matters: Finland will be the third European country to lose gas imports from Russia since the start of the Kremlin's unprovoked invasion of Ukraine. The expected cutoff comes on the heels of Helsinki formally applying to join NATO.

  • Gasum, Finland's energy provider, said its filling stations will continue to function normally. It will receive gas from an alternative source through the Balticconnector pipeline, which runs from Estonia to Finland.
  • The Finnish government also signed a ten-year lease agreement on Friday for a U.S. liquefied natural gas terminal ship to safeguard the country's energy supply.

What they're saying: “It is highly regrettable that natural gas supplies under our supply contract will now be halted," said Mika Wiljane, Gasum's CEO, in a statement.

  • "We have been carefully preparing for this situation,” he added.

The big picture: Russia cut gas exports to Poland and Bulgaria in April after those countries also refused to make payments in rubles. They and others have said the ultimatum amounts to a breach of contract.

  • Russian President Putin's payment demand was part of an effort to bolster the ruble, which collapsed immediately after the invasion of Ukraine. However, the currency has recently rebounded.
  • Putin warned Finnish President Sauli Niinistö last week that a Finnish application for NATO membership "could have a negative effect" on relations between the two countries. Finland and Sweden both formally applied to join the defensive alliance this week.

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