Russia has stopped natural gas supplies to Finland

Politics 20 May, 2022

Following Poland and Bulgaria, the Russian giant Gazprom has decided to stop supplying natural gas to Finland, which has just announced its intention to join the North Atlantic Treaty Organization.

Officially, the decision made public on Friday, May 20, seems to have nothing to do with Finland’s application to join the North Atlantic Treaty Organization (NATO), submitted two days earlier in Brussels. However, it is difficult not to see a coincidence in this: from 7 a.m. on Saturday, May 21, Russian gas supplies to Finland stopped, just a week after Russia stopped exporting electricity to its neighbor.

The Russian Gazprom Group motivates its decision by the refusal of its Finnish client Gasum to pay for imports in rubles. Electricity supplier RAO Nordic, a subsidiary of the Russian company Inter RAO, for its part mentioned problems with payment.

This is not a surprise for Helsinki: «We have carefully prepared for this situation and, provided there are no interruptions in the gas transmission network, we will be able to provide all our consumers with gas in the coming months», – Mika Viljanen assured. CEO of Gazum.

While natural gas accounts for only 5% of the energy consumed in Finland, 92% of it comes from Russia. In summer, the needs should be easily covered thanks to the Balticconnector pipeline between Finland and Estonia, connected to the Inchukalns underground storage facility in Latvia. But the winter period will be more difficult, because the pipeline capacity will not be enough to cover all the needs, estimated Olga Vaisanen, a spokeswoman for Gasum.

Hence the importance of the contract signed by the Finnish Gas Network with the American Excelerate Energy on Friday in Helsinki, just when Gazprom announced the closure of the crane. It provides for a ten-year lease of a floating terminal for receiving liquefied natural gas (LNG), which, according to Finance Minister Annika Saarikko, will allow Finland to abandon Russian gas. Helsinki hopes to be able to accommodate a huge ship measuring 291 by 43 meters in one of its ports in the fourth quarter.

If the work is not completed on time, the platform can be placed in Estonia. The Gasgrid operators and the Estonian Elering are indeed negotiating the joint management of the terminal, the rental cost of which is estimated at 460 million euros for ten years. The Exemplar vessel can hold up to 68,000 tons of LNG, which corresponds to approximately 1,050 gigawatt-hours of energy. It will be refueled two or three times a month and should easily cover the combined gas consumption of Finland and Estonia with a large excess, assured Stephen Kobos, head of Excelerate Energy.