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Russia's Gazprom halts gas flows to Finland over payments dispute

US Rep. Ilhan Omar (D-MN) (L) talks with Speaker of the House Nancy Pelosi (D-CA) during a rally with fellow Democrats before voting on H.R. 1, or the People Act, on the East Steps of the US Capitol on March 08, 2019 in Washington, DC. (AFP photo)
The logo of Russia's energy giant Gazprom is pictured at one of its petrol stations in Moscow on May 11, 2022. (Photo by AFP)

Russia's Gazprom has halted gas exports to neighboring Finland in what marks the latest escalation of an energy payments dispute with Western nations.

Gazprom Export suspended natural gas supplies to Finnish state-owned gas wholesaler Gasum on Saturday after the company refused to pay for Russian gas in rubles.

"Gas imports through Imatra entry point have been stopped," Finnish gas system operator Gasgrid Finland said in a statement.

Gazprom has earlier demanded that European countries pay for Russian gas supplies in rubles because of sanctions imposed over Moscow's military operation in Ukraine.

Meanwhile, Gasum also confirmed on Saturday that the flows had stopped, saying, “Natural gas supplies to Finland under Gasum's supply contract have been cut off.”

"Starting from today, during the upcoming summer season, Gasum will supply natural gas to its customers from other sources through the Balticconnector pipeline," it said in a statement.

Balticconnector links Finland to neighboring Estonia's gas grid.

While the majority of gas used in Finland comes from Russia but gas only accounts for about 5% of its annual energy consumption.

Gasum, the Finnish government and individual gas consuming companies in Finland have said they were prepared for a shutdown of Russian flows and that the country will manage without.

Additionally, Finland has agreed to charter a storage and regasification vessel from US based Excelerate Energy to help replace Russian supplies, begining in the fourth quarter this year.

Moscow cut off gas to Bulgaria and Poland last month after they refused to comply with the new payment terms, as most European supply contracts are denominated in euros or dollars.

In a speech on Friday, Russian Defense Minister Sergei Shoigu said Moscow is set to take “adequate countermeasures” to oppose military threats near its western borders posed by Finland and Sweden’s NATO membership.

Finland and Sweden formally applied to join the NATO alliance on Wednesday. Last week, Russian President Vladimir Putin warned that Moscow would respond if the alliance boosted military infrastructure in the two Nordic states.

In the meantime, US President Joe Biden has supported Finland and Sweden’s NATO membership, saying that the two Nordic countries will have the “full, total, complete backing” of the US for their application to join the military bloc.

In a meeting with Swedish Prime Minister Magdalena Andersson and Finnish President Sauli Niinistö in Washington, Biden claimed that “new members joining NATO is not a threat to any nation.”

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