Finnish state-owned energy company Gasum terminated its long-term pipeline natural gas supply contract with Russian Gazprom Export, said Gasum in a press release on Monday.
Earlier in April 2022, Gazprom Export demanded that the payments agreed in the supply contract should be paid in rubles instead of euros but Gasum did not accept the demand.
In addition, the companies had a significant disagreement regarding certain other demands made based on the contract.
Due to these reasons, Gasum referred the matter to arbitration in accordance with the supply contract.
In November 2022, the arbitral tribunal issued an order said that Gasum was not obligated to pay in rubles nor through the proposed payment procedure.
Furthermore, the arbitral tribunal ordered Gasum and Gazprom Export to continue their bilateral contract negotiations to resolve the situation.
“The negotiations between Gasum and Gazprom Export have now ended. 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 May 22, 2023,” said Gasum in the press release.
The parties will continue to finalize the details of the contract termination. Gasum will not comment on these details of the contract termination.
Gazprom Export ceased the pipeline natural gas deliveries to Gasum in May 2022 and there has not been any pipeline natural gas deliveries from Russia since then.
The termination concerns only the pipeline gas supply contract. The long-term LNG supply contract Gasum has with Gazprom Export remains in place.
- Pipeline supply deal
- Russian Gazprom