Released June 01, 2022 | GALWAY, IRELAND
en
Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Russia has cut gas supplies to neighboring Finland after the country refused to bow to pressure to pay for supplies in rubles, the Russian currency.
The move comes just weeks after Russia's state-owned Gazprom imposed a similar halt on supplies to Poland and Bulgaria. However, Finland has acted quickly to cover the loss by inking a deal for U.S. liquefied natural gas (LNG).
Since its invasion of Ukraine in February, the European Union (EU) and other nations have imposed sanctions on Russia which, in turn, has begun using gas stoppages as a weapon. It is also attempting to force the companies that buy its oil and gas to pay in rubles to help prop up the ailing currency. Russia has also expressed anger at Finland and Sweden's simultaneous applications to join the NATO (North Atlantic Treaty Organization) military alliance. Natural gas accounts for approximately 5% of Finland's total energy consumption and is mainly used in industrial processes, heavy transport and the cogeneration of electricity and heat. It relies exclusively on imports. A week earlier, Russia stopped electricity exports to Finland which account for 10% of the country's total consumption. The country's grid operator, FinGrid, stated: "The lack of electricity import from Russia will be compensated by importing more electricity from Sweden and by generating more electricity in Finland." It highlighted that this year will see an additional 2,000 megawatts (MW) of new wind power added, and the country expects to be self-sufficient in electricity by next year.
"It is highly regrettable that natural gas supplies under our supply contract will now be halted," said Mika Wiljanen, chief executive officer of Finland's key gas importer Gasum. "However, we have been carefully preparing for this situation and provided that there will be no disruptions in the gas transmission network, we will be able to supply all our customers with gas in the coming months."
Gazprom stated: "Gazprom completely suspends gas supplies to Finland's Gasum due to failure to pay in rubles. Payments for gas supplied since April 1 must be made in rubles via new account details, of which the counterparties were duly informed. In 2021, Gazprom Export delivered 1.49 billion cubic meters of gas to Gasum, which made up two-thirds of Finland's total gas consumption."
Meanwhile Finland's state-owned Gasgrid Finland Oy has responded by completing a 10-year deal with U.S. company Excelerate Energy Inc. (NYSE:EE) to lease the Exemplar floating storage and regasification unit (FSRU). The project will enable Finland and Estonia to be independent of the Russian pipeline gas. The floating LNG terminal has a capacity of about 151,000 cubic meters (m3) and the deal is valued at approximately 460 million euro (US$492 million). The project schedule will be specified in June.
"We have launched a number of measures to improve our security of supply, including the supply of natural gas," explained Annika Saarikko, the Finnish Minister of Finance. "The LNG terminal will make it possible for us to break free from Russian gas. I look forward to seeing all parties work swiftly to complete the project."
Last week, Industrial Info reported that the European Commission plans to spend 10 billion euro (US$11 billion) to create new gas infrastructure, split across existing and new pipelines as well as support for newer facilities needed for the importation, storage and transportation of LNG. For additional information, see May 19, 2022, article--Europe Proposes $220 Billion Boost To End Reliance on Russian Energy. Industrial Info has been covering the steady increase in U.S. LNG deals in Europe over the years, most recently to Poland, a new customer. For additional information, see May 18, 2022, article--Foreign LNG Moving into Russia's Backyard.
Industrial Info Resources (IIR) is the world's leading provider of market intelligence across the upstream, midstream and downstream energy markets and all other major industrial markets. IIR's Global Market Intelligence Platform (GMI) supports our end-users across their core businesses, and helps them connect trends across multiple markets with access to real, qualified and validated project opportunities. Follow IIR on: LinkedIn.
The move comes just weeks after Russia's state-owned Gazprom imposed a similar halt on supplies to Poland and Bulgaria. However, Finland has acted quickly to cover the loss by inking a deal for U.S. liquefied natural gas (LNG).
Since its invasion of Ukraine in February, the European Union (EU) and other nations have imposed sanctions on Russia which, in turn, has begun using gas stoppages as a weapon. It is also attempting to force the companies that buy its oil and gas to pay in rubles to help prop up the ailing currency. Russia has also expressed anger at Finland and Sweden's simultaneous applications to join the NATO (North Atlantic Treaty Organization) military alliance. Natural gas accounts for approximately 5% of Finland's total energy consumption and is mainly used in industrial processes, heavy transport and the cogeneration of electricity and heat. It relies exclusively on imports. A week earlier, Russia stopped electricity exports to Finland which account for 10% of the country's total consumption. The country's grid operator, FinGrid, stated: "The lack of electricity import from Russia will be compensated by importing more electricity from Sweden and by generating more electricity in Finland." It highlighted that this year will see an additional 2,000 megawatts (MW) of new wind power added, and the country expects to be self-sufficient in electricity by next year.
"It is highly regrettable that natural gas supplies under our supply contract will now be halted," said Mika Wiljanen, chief executive officer of Finland's key gas importer Gasum. "However, we have been carefully preparing for this situation and provided that there will be no disruptions in the gas transmission network, we will be able to supply all our customers with gas in the coming months."
Gazprom stated: "Gazprom completely suspends gas supplies to Finland's Gasum due to failure to pay in rubles. Payments for gas supplied since April 1 must be made in rubles via new account details, of which the counterparties were duly informed. In 2021, Gazprom Export delivered 1.49 billion cubic meters of gas to Gasum, which made up two-thirds of Finland's total gas consumption."
Meanwhile Finland's state-owned Gasgrid Finland Oy has responded by completing a 10-year deal with U.S. company Excelerate Energy Inc. (NYSE:EE) to lease the Exemplar floating storage and regasification unit (FSRU). The project will enable Finland and Estonia to be independent of the Russian pipeline gas. The floating LNG terminal has a capacity of about 151,000 cubic meters (m3) and the deal is valued at approximately 460 million euro (US$492 million). The project schedule will be specified in June.
"We have launched a number of measures to improve our security of supply, including the supply of natural gas," explained Annika Saarikko, the Finnish Minister of Finance. "The LNG terminal will make it possible for us to break free from Russian gas. I look forward to seeing all parties work swiftly to complete the project."
Last week, Industrial Info reported that the European Commission plans to spend 10 billion euro (US$11 billion) to create new gas infrastructure, split across existing and new pipelines as well as support for newer facilities needed for the importation, storage and transportation of LNG. For additional information, see May 19, 2022, article--Europe Proposes $220 Billion Boost To End Reliance on Russian Energy. Industrial Info has been covering the steady increase in U.S. LNG deals in Europe over the years, most recently to Poland, a new customer. For additional information, see May 18, 2022, article--Foreign LNG Moving into Russia's Backyard.
Industrial Info Resources (IIR) is the world's leading provider of market intelligence across the upstream, midstream and downstream energy markets and all other major industrial markets. IIR's Global Market Intelligence Platform (GMI) supports our end-users across their core businesses, and helps them connect trends across multiple markets with access to real, qualified and validated project opportunities. Follow IIR on: LinkedIn.
