Finland is prepared for Russia cutting its gas supplies, says minister

Metsa Board Oyj

05/05/2022 13:01

By Anne Kauranen and Essi Lehto
    HELSINKI, May 5 (Reuters) - Finland is prepared for the
possibility of its eastern neighbour Russia cutting off its gas
deliveries, a government minister told Reuters, ahead of the
Nordic country's decision on whether to join NATO. 
    The Finnish government said on April 28 it would not abide
by Russia's demand for gas payments to be made in roubles, which
could lead to Russia cutting off its gas supplies this month, as
has happened in Poland and Bulgaria.  urn:newsml:reuters.com:*:nL2N2WR0XV
    Finland's state-owned gas operator Gasum is due to respond
this month to a letter on the rouble payments from Russia's
Gazprom  GAZP.MM . A source familiar with the matter told
Reuters the deadline for its response is May 20.   
    The country is also due to announce as soon as next week if
it will join the Western defence alliance NATO, which Russia has
warned it against doing. That has added to fears that Russia
could try to blackmail it by halting gas deliveries. urn:newsml:reuters.com:*:nL5N2WR6ZB
   
    "Finland is prepared for the possibility that gas deliveries
from Russia would end," Finland's Minister of European Affairs
Tytti Tuppurainen told Reuters.
    Tuppurainen said measures Finland had taken to prepare
include maintaining alternative energy sources, and the
government also recently announced that it will lease a floating
LNG terminal with Estonia.  urn:newsml:reuters.com:*:nL2N2W50KF  urn:newsml:reuters.com:*:nO9N2UF00N
    Roughly 60-70% of the gas used in Finland originates from
Russia. However, it accounted for little more than 5% of the
country's total energy consumption last year, Statistics
Finland's preliminary data showed, with oil, wood-based biomass
and nuclear power being the main sources of energy.
    Most natural gas is used in industrial production, gas
markets expert Heikki Lindfors of Finnish Energy interest group
said.
    "The share of gas in Finland's total consumption is small in
percentages, but it is used by industrial sectors in which it
cannot be easily replaced," he said, adding some companies could
end up having to stop their production.    
    The largest user is Finland's chemical industry, which
includes energy group Neste's  NESTE.HE  oil refining activities
in Porvoo.
    Neste's outgoing Chief Executive Peter Vanacker told Reuters
last week that tests to see whether the group could use
alternative fuels such as propane to replace gas had been
successful. 
    "We feel that we are quite ready for this," Vanacker said,
referring to the possibility of Russian deliveries ending.
    Finland's forest industries are the second largest user of
natural gas. Major paperboard and pulp producer Metsa Group,
said it was looking into alternatives to gas.
    "In practice, the alternative to Russian natural gas is
mainly liquefied natural gas or oil," it told Reuters.
    Forestry group UPM  UPM.HE  said it had already replaced
Russian natural gas with LNG at all its units. 

 (Reporting by Anne Kauranen and Essi Lehto)
 ((anne.kauranen@thomsonreuters.com; +358401895560;))