The long-term LNG supply contract between Gasum and Gazprom Export is intact. Credit: ln.63 via Shutterstock.

Gasum, a Finnish government-backed energy company, has announced that it has terminated the natural gas supply contract with Russia’s Gazprom Export over a payment-related dispute.

Last April, Gazprom Export asked Gasum that the payments specified in the supply contract should be made in roubles rather than euros.

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The request was turned down by Gasum and in May 2022, Gazprom Export stopped delivering natural gas to Gasum through pipelines.

Subsequently, Gasum decided to bring the matter to arbitration.

According to the arbitral tribunal’s decision issued in November 2022, Gasum had no obligation to make payments in roubles or follow the proposed payment process.

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In addition, the tribunal asked Gasum and Gazprom Export to engage in further contract discussions to address the issue.

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“The parties were not able to resolve the situation within the period defined by the arbitral tribunal and therefore, Gasum has terminated the long-term natural gas supply contract with Gazprom Export on 22 May 2023,” Gasum said.

It added that the termination concerns only the pipeline gas supply contract. The long-term LNG supply contract Gasum between Gazprom Export is intact.

“Gazprom Export confirms it had received a notification from the Finnish company Gasum about the termination of a long-term contract for the supply of pipeline gas. The company is conducting a legal analysis of further steps in this matter,” Gazprom Export was quoted by Reuters as saying.

The news comes hard on the heels of Polish pipeline operator Europol Gaz filing an arbitration lawsuit against Gazprom to recover losses it suffered due to the Russian energy giant ceasing gas deliveries last year. Similarly, declining to make payment in roubles was a key issue.