After the power outage, the gas outage is approaching: Finland's state-owned energy company says Gazprom may be shut down on Friday

The Surging News reporter Yang Yang

Finland's state-owned energy company Gasum issued an early warning announcement on May 18 local time that natural gas imports from Russia may end supply this week.

Gasum believes that Finland's gas supply is facing real risks due to the termination of the gas supply contract. Gas imports from Russia could be shut down late On Friday, May 20 or Saturday, May 21, and Gasum did not receive any information on the matter from Gazprom Export or russian gas carriers.

Gasum said it will continue to work with customers and the authorities responsible for emergency supply to prepare for the situation. In the coming summer, Gasum aims to ensure that Finnish gas customers are offered gas from other sources through the Balticconnector gas pipeline. However, transmission capacity limitations can make the move challenging.

Balticconnector, a two-way gas pipeline connecting Finland and Estonia, went into commercial operation in January 2020, bringing Finland into the European gas pipeline network while ending Gazprom's history as Finland's sole gas supplier.

The pipeline's estimated capacity is 7.2 million cubic meters of natural gas per day. But Finland, which lacks indigenous fossil energy, is still highly dependent on Russian imports, and according to statistics Finland, Finland will receive about 34% of its energy supply from Russia in 2021, 80% of its crude oil and 92% of its natural gas from Russia.

This is not the first time Gasum has warned of a gas outage. The Paper noted that the company had issued an announcement on May 17 saying that it had decided to submit the supply contract to arbitration because it could not accept the ruble payment request made by the Russian side. "Under the current contract, there is an increased risk that the gas supply will be stopped and gas imports from Russia to Finland may be terminated."

Gasum said in an announcement on the 17th that it has a long-term gas supply contract with Gazprom Export, and the two sides have been negotiating the details of the contract since last fall. In April, Gazprom Export sent a letter to Gasum requesting that future payments agreed upon in the supply contract should be made in rubles instead of euros. In addition, Gazprom Export filed other claims against Gasum in connection with the supply contract.

Gasum stressed that it would not accept requests to pay in rubles and therefore would not be paid in rubles or the payment arrangement proposed by Gazprom Export. In addition, there was a significant dispute between the two companies over other claims filed under the contract. "This is unacceptable to Gasum and we have decided to submit the dispute relating to the supply contract to arbitration under the contract. The matter will be considered in the arbitration. ”

Russian President Vladimir Putin signed a presidential decree on March 31 on the settlement of gas trade in rubles with "unfriendly" countries and regions. Putin said that in order to buy Russian gas, "unfriendly" countries and regions must open ruble accounts in Russian banks, and the new regulations will take effect on April 1. Refusal to pay in this way will be deemed to be in breach of contract by the Russian side, and all consequences will be borne by the buyer. The cost of gas supply by the Russian side from April 1 should be settled in the second half of April or May.

Before Finland, Poland and Bulgaria were among the first European countries to be shut down for refusing the ruble settlement order. Russia notified the two countries of the disruption of gas supplies from April 27. Affected by this, the price of natural gas in Europe jumped on the day and led to an increase in international oil prices.

The US media quoted sources on the 12th as reporting that as the payment deadline for the first settlement after the "ruble settlement order" came into effect, 20 European companies have opened ruble accounts to meet the requirements of the Russian side to settle natural gas in rubles.

The potential outage is approaching on the eve of Finland's accession to NATO. Finland and Sweden formally applied to join the North Atlantic Treaty Organization on the 18th. The two countries' abandonment of their long-held policy of neutrality and non-alignment has been described by Western media as "one of the most significant changes in Europe's security architecture in decades." Nato's headquarters in Brussels, the capital of Belgium, held a brief ceremony on the same day. The Permanent Representatives of Finland and Sweden to NATO formally presented their application to NATO Secretary-General Jens Stoltenberg at the ceremony.

Just a few days ago, Russia stopped supplying electricity to Finland because of "payment problems". Finnish grid operator Fingrid announced on May 13 that RAO Nordic Oy, a subsidiary of Russia's Inter RAO Group, suspended power supply to Finland from 1 p.m. on May 14.

Fingrid said Finland's electricity adequacy was not threatened. Recently, electricity imports from Russia accounted for about 10% of Finland's total electricity consumption. Reima Päivinen, senior vice president of power system operations at Fingrid, said more electricity would be imported from Sweden and increased power generation in Finland to make up for the lack of electricity imports from Russia.

The timing of this is rather delicate. Finnish President Sholi Niinistö and Prime Minister Sanna Marin issued a joint statement on the 12th, making it clear that Finland will apply to join the North Atlantic Treaty Organization. The Russian side responded on the same day that Finland's accession to NATO poses a direct threat to Russia, and the Russian side is considering retaliation.

Rao Nordic Oy explained in the announcement that the company has been responsible for importing electricity from Russia to Finland for many years and selling it to the Nord Pool exchange (Nordic Power Exchange). "Unfortunately, we note that trading volume fees sold on the Nord Pool exchange since May 6 have not been deposited into our bank accounts. This is a special situation, occurring for the first time in more than two decades of trading history. The company added, "Unfortunately, in the current lack of cash income, RAO Nordic is unable to pay for electricity imported from Russia." As a result, we were forced to suspend electricity imports from May 14. We hope that the situation will improve as soon as possible and that electricity trade with Russia will resume. ”

"Finland is on the verge of becoming self-sufficient in electricity." Fingrid stressed that Finland's electricity self-sufficiency rate is increasing, especially finland's wind power generation is increasing year by year. This year alone, 2,000 new wind turbines are expected to be connected to the grid. "Finland is on track to achieve electrical self-sufficiency by 2023."

Finland is also pinning its hopes for greater electricity self-sufficiency on the Olkiluoto 3 (OL3) nuclear power project on the southwest coast.

Construction of the OL3 began in August 2005 and was originally scheduled to be put into commercial operation in 2009, but the entire construction process experienced various delays and setbacks, becoming the most protracted project in the history of nuclear power. On March 12 this year, OL3 will be connected to Finland's national grid and will gradually rise to full power operation, when the unit will provide about 14% of Finland's electricity.

At the end of April, Finnish nuclear power operator Teollisuuden Voima Oyj announced that it would postpone the start of regular power production at OL3 from July to September.

Editor-in-Charge: Li Yuequn

Proofreader: Luan Meng