Finland's Gasum to pay Russia's Gazprom $311mln for breach of contract

By Al Mayadeen English
Source: Agencies
18 Nov 2022 09:54

Still, Gasum claims that an arbitration tribunal ruled that it was not required to pay in rubles to the Russian gas supplier.

Finnish gas company Gasum (Baltic Transport Journal)

According to Gazprom Export LLC, a Stockholm arbitration court ruled on Thursday that the Finnish gas company, Gasum, is required to pay the former more than 300 million euros ($311 million) as a result of failing to comply with its take-or-pay obligations.

A day earlier, Gasum, which has a long-term natural gas supply contract with Gazprom, claimed that an arbitration tribunal ruled it was not required to pay in rubles to the Russian gas supplier after it subjected Gazprom to arbitration in May following Gazprom's demand for the Finnish company to pay for gas in rubles.

"According to the award, Gasum is not obligated to pay in rubles nor through the proposed payment procedure," Gasum said in its statement on Wednesday.

Finland imports most of its gas from Russia, and natural gas makes up about 8% of Finland's energy consumption.

"The Arbitration tribunal," said Gazprom in its Thursday statement, "among other things, ordered Gasum to pay Gazprom Export debts of more than 300 million euros for gas supplies and in connection with non-fulfillment of a 'take or pay' obligation, as well as interest for late payment."

According to the Russian side, the tribunal was a confirmation of the "legality of the suspension of gas supplies" in cases where the buyer failed to pay in rubles, which Russian President Vladimir Putin introduced this year, adding that the negotiations must go on to resolve the issue for future supplies.

In efforts to reduce the risks of depending on Russian energy exports, the Finnish government announced back in May that the country had signed a 10-year lease agreement with US-based Excelerate Energy for a liquefied natural gas (LNG) terminal ship.