Russia is preparing to cut off natural gas supplies to a third European country that refuses to pay in rubles, as demanded by the Kremlin.
Russian gas will be cut off from Finland at 7 a.m. local time on Saturday, according to a statement issued by the Finnish state gas utility Gasum on Friday. Poland and Bulgaria were shut off in late April because they refused to pay in Russian currency, which EU officials characterized as "blackmail" by Moscow.
"It's quite unfortunate that natural gas shipments under our supply contract will now be suspended," Gasum CEO Mika Wiljanen said, adding that the business has been "carefully prepared for this situation."
Gasum announced earlier this week that it was preparing for Russia to shut off the taps after it refused to comply with President Vladimir Putin's demand that "unfriendly" countries pay for gas in rubles rather than the euros or dollars specified in their contracts.
Finland formally announced its decision to join NATO on Sunday, abandoning decades of neutrality and rejecting Russian threats of vengeance in order to bolster its security following the outbreak of the Ukrainian conflict.
According to the International Energy Agency, Finland relies on Russia for roughly 68 percent of its natural gas consumption in 2020.
According to Eurostat and the European Network of Transmission System Operators for Gas data, Russia's gas exports account for just 3% of the Nordic nation's total energy mix, which includes energy generated from biofuels and nuclear sources.
Gasum "will be able to supply all [of its] customers with gas in the coming months" if the gas transmission network is not disrupted, but Wiljanen warned that the winter would be "challenging."
According to Gasum Vice President Olga Väisänen, Finland receives gas through its Baltic connection via Estonia. The pipeline connects Finland's gas transmission network to Estonia's, allowing it to tap into Latvia's underground storage.
Customers have been told by Gazprom that they must open two accounts with Gazprombank, one in euros and the other in rubles, to make gas payments.
Since then, EU officials, national governments, and energy companies have been frantically attempting to determine whether the new payment mechanism violates Russia's sanctions.
There is still a lot of ambiguity. Several of Europe's energy behemoths have begun the process of establishing new accounts. On Tuesday, Eni (E), the Italian energy giant, announced that it would open two accounts with Gazprombank, one in euros and the other in rubles.
The European Commission, on the other hand, maintains that the guidance it issued last week forbids buyers from opening a ruble account. At a press conference on Tuesday, EU Commission Chief Spokesperson Eric Mamer said that such a move would be in violation of sanctions.
"Anything that goes beyond opening an account with Gazprombank in the currency of the contract and making a payment to that account, and then issuing a statement saying that... you have completed the payment," he said, is in violation of the sanctions.
As bills become due, some countries are in desperate need of a solution. Germany, the bloc's largest economy, relies heavily on Russian gas to power its homes and industries, despite successfully reducing Russia's share of imports to 35 percent from 55 percent before the war began.
The European Union announced earlier this week that it will spend €210 billion ($222 billion) to wean itself off Russian oil and gas.
Its "REPowerEU" plan aims to cut its reliance on Russian gas by 66 percent by the end of the year — and completely eliminate it by 2027 — by conserving energy, finding alternative sources, and accelerating the transition to renewables.