Russia halts gas supplies to Finland

Russia on Saturday halted providing natural gas to neighbouring Finland, which has angered Moscow by applying for NATO membership, after the Nordic country refused to pay supplier Gazprom in rubles.

Natural gas accounts for about eight percent of Finland’s energy consumption and most of it comes from Russia.

Following Russia’s 24 February invasion of Ukraine, Moscow has asked clients from “unfriendly countries” -- including EU member states -- pay for gas in rubles, a way to sidestep Western financial sanctions against its central bank.

Finnish state-owned energy company Gasum said it would make up for the shortfall from other sources through the Balticconnector pipeline, which connects Finland to Estonia, and assured that filling stations would run normally.

“Natural gas supplies to Finland under Gasum’s supply contract have been cut off,” the company said in a statement.

Gasum said Friday that it had been informed by Gazprom Export, the exporting arm of Russian gas giant Gazprom, that the supply would stop on Saturday morning.

In April, Gazprom Export demanded that future payments in the supply contract be made in rubles instead of euros.

Gasum rejected the demand and announced on Tuesday it was taking the issue to arbitration.

Gazprom Export said it would defend its interests in court by any “means available”.

Gasum said it would be able to secure gas from other sources and that gas filling stations in the network area would continue “normal operation.”

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

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

Both Finland and Sweden are seemingly on the fast track to joining the Western military alliance, with US President Joe Biden offering “full, total, complete backing” to their bids.

But all 30 existing NATO members must agree on any new entrants, and Turkey has condemned the Nordic neighbours’ alleged toleration of Kurdish militants and has so far voiced opposition to letting them in.

Russian Defence Minister Sergei Shoigu has said the Kremlin would respond to any NATO expansion by creating more military bases in western Russia.

Saturday’s halt to gas shipments follows Moscow cutting off Poland and Bulgaria last month in a move the European Union described as “blackmail”.