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Finland's Gasum to cease Russian LNG imports in compliance with EU sanctions

by Olena Goncharova June 26, 2024 1:58 AM 2 min read
Illustrative image: A worker standing on the uploading dock of Cavaou LNG terminal in Fos-sur-Mer, France, on June 22, 2023. (Clement Mahoudeau/AFP via Getty Images)
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Finland's Gasum, a major gas supplier to the Nordic region, announced on June 25 that it will cease purchasing and importing Russian liquefied natural gas (LNG) in July in accordance with new European Union sanctions.

"Gasum complies with all sanctions imposed by the EU and will not purchase or import Russian LNG as of 26 July," the company said in a statement.

On June 24, EU member nations adopted a 14th package of sanctions against Russia, targeting the country's gas exports for the first time. The new package also forbids any new investments or provision of goods toward Russian LNG projects, such as the Arctic LNG 2 and Murmansk LNG.

Although other LNG sanctions in the EU's latest package will not take effect until next year, the clause affecting Finland and Sweden is effective from July 26.

"The sanctions adopted by the EU do not allow Gasum to terminate its agreement with Gazprom Export but constitute a force majeure on the purchase or import of Russian LNG to off-grid terminals," Gasum said.

The company has a long-term LNG supply contract with Gazprom Export, established before 2022, under a take-or-pay agreement. This agreement obligates Gasum to pay for the contracted gas regardless of whether it uses it.

The geographical distribution and nature of Finnish gas imports have changed significantly. Russian pipeline gas has been replaced by Western LNG. Russian pipeline gas has been replaced by Western LNG. According to the country's foreign trade statistics, 65% of gas imports in the last quarter of 2023 came from the United States, 23% from Norway, and 7% from Russia.

Riku Huttunen, who heads the Energy Department of the Ministry of Economic Affairs and Employment, said that the government is currently forming a working group to prepare a comprehensive ban on Russian gas imports, with a legislative proposal expected next winter.

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