Finland's Gasum still buying gas from Russia under existing contract

By Al Mayadeen English
Source: Agencies
21 Mar 2023 15:27

Gasum confirms that the company remains in a long-term agreement with Gazprom.

An image of a truck pertaining to the Gasum company in Finland near a gas pump in an undated photo (Gasum)

Data from Finnish customs show that Finland's state-owned Gasum is still purchasing gas from Russia, amounting to a total of 175 million euros of natural gas since February 2022 - even after gas from Russia was suspended in Europe as a result of the war in Ukraine.

Gasum confirmed to the Finnish national broadcasting channel, Yle, that the company remains in a long-term agreement with Gazprom that started "before 2022" and which remains valid and functional "for several more years".

The benefits from the contract go to oligarch Gennady Timchenko who is a stakeholder in the private company Novatek, the owner of a gas liquefaction plant that recently transferred a shipment of gas to Gasum.

However, Gasum denied this and in response, stated that merely the bare minimum was purchased as stipulated in the contract with Russia's firm Gazprom. Finland imports most of its gas from Russia, and natural gas makes up about 8% of Finland's energy consumption.

It is worth noting that Timchenko's name is on sanctions lists by both the EU and the US on account of his close relationship with Russian President Vladimir Putin.

Failing to comply with the 'take-or-pay'

In response to an email by Yle, Gasum disclosed that "The contract is a so-called take-or-pay contract, which is common in gas supply contracts. It means that Gasum is obliged to pay for a certain amount of liquefied natural gas (LNG) every year, whether we get it from Russia or not,"

The Finnish company added that there are no legal bases to end the contract. Although the EU has not completely banned the sale and purchase of Russian gas, some EU states have decided to refrain from its purchase.

"Since the beginning of the war, Gasum has only imported the minimum amount of LNG from Russia as stipulated in the contract. We have not agreed on any additional shipments and we do not intend to do so in the future," Gasum said.

Back in November, a Stockholm arbitration court ruled that Gasum is required to pay Gazprom more than 300 million euros ($311 million) as a result of failing to comply with its take-or-pay obligations.

A day earlier, Gasum 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.