Finland's Gasum to continue negotiations with Gazprom Export over gas dispute

Finland's Gasum said Nov. 16 it would continue bilateral negotiations with Russia's Gazprom Export over the companies' gas supply contract following an order from an arbitration tribunal.

Russian gas supplies to Gasum were halted on May 21 after the Finnish company refused to comply with the terms of Moscow's new ruble-based payment mechanism.

Gasum took the case to arbitration, saying it did not accept the changed payment terms. It said there were also other disputes over the parties' long-term contract.

The tribunal issued its decision on the case on Nov. 14. "According to the award, Gasum is not obligated to pay in rubles nor though the proposed payment procedure," the company said.

"Furthermore, the tribunal ordered Gasum and Gazprom Export to continue their bilateral contract negotiations to resolve the current situation," it said.

Gazprom Export could not be reached for comment Nov. 16.

Gasum said Russian gas deliveries under the existing supply contract would not resume "for the time being."

Finland was historically dependent on Russian gas imports, and Gazprom supplied 1.49 Bcm of gas to the country in 2021.

Since the cutoff in May, Finland has been importing gas via the Balticconnector link with Estonia which gives Finland access to regasified LNG entering the region via Lithuania as well as gas stored in Latvia.

Finland is also set to deploy a 5 Bcm/year floating LNG import terminal at the port of Inkoo next month, with first commercial LNG deliveries expected in January.

Ruble dispute

Gasum was one of a handful of companies whose supplies of Russian gas were halted over the ruble row.

The first companies to lose access to Russian gas were Bulgaria's Bulgargaz and Poland's PGNiG on April 27, followed by Gasum on May 21.

Deliveries were also halted on May 31 to Dutch trader GasTerra and on June 1 to Denmark's Orsted and to Shell, whose contract was for Russian gas supply into Germany.

As well as the cutoffs, Russia gradually implemented additional gas supply curtailments to Europe through 2022, halting deliveries via Nord Stream and Yamal-Europe, and cutting exports via Ukraine.

The much lower Russian deliveries pushed European gas prices to record levels in late August.

Platts, part of S&P Global Commodity Insights, assessed the benchmark Dutch TTF month-ahead price at a record Eur319.98/MWh on Aug. 26.

Prices have weakened in recent months due to healthy gas stocks and demand reductions, but are still historically high, with Platts assessing the TTF month-ahead price at Eur122.48/MWh on Nov. 15.

Russian President Vladimir Putin in March signed the decree requiring EU buyers to pay in rubles for Russian gas via a new currency conversion mechanism or risk having supplies suspended.

A number of European buyers of Russian gas agreed to the new scheme, opening the relevant accounts with Gazprombank to enable the payment conversion for gas into rubles.