Gasum's LNG purchases from Russia
Gasum is contractually obligated to source liquefied natural gas (LNG) from Russian energy company Gazprom under a long-term agreement. Currently no EU-level or national sanctions in Gasum’s countries of operation are in force concerning natural gas or LNG.
Gasum procures LNG from a number of different sources. Gasum has a long-term sourcing agreement with, for example, the Risavika liquefaction plant in Norway. In addition to Norway, we procure liquefied natural gas (LNG) globally through terminals in Central Europe but also from Russia, although the majority of the LNG directly sourced by Gasum is coming from non-Russian sources.
Gasum has a long-term LNG supply contract with Russian gas company Gazprom Export which was concluded before 2022. The LNG supply contract is a so-called take-or-pay agreement, which is common in gas supply contracts. This means that Gasum has to pay for a certain amount of gas each year to Gazprom, weather we collect it or not. Should we decide not to collect this amount, we are still obligated to pay for the gas and have to source the same amount of LNG again from another supplier to fulfill agreed deliveries to our customers.
No sanctions in force at the moment
From the start of the war we have only collected the minimum amount of LNG from Russia that we are obligated to collect under the agreement with Gazprom. We have not agreed to any additional volumes and will not do so in the future.
Natural gas or LNG deliveries from Russia are currently not sanctioned by the EU or any country Gasum operates in, which means that, as of now, Gasum has no legal grounds to stop purchasing gas from Russia. We are closely monitoring developments with relevant authorities and our stakeholders and will act swiftly in accordance with any possible measures set out by the European Union. Naturally, we hope that this situation will be resolved soon.
Pipeline gas deliveries to Finland discontinued
Gasum also has a long-term pipeline natural gas supply contract with Gazprom Export. In April 2022, Gazprom Export sent Gasum a letter, requiring that going forward the payments agreed in the supply contract should be made in rubles instead of euros. In addition, Gazprom Export made other claims regarding the supply contract. These were matters, that Gasum would not accept and decided to take these disputes to arbitration in accordance with the contract.
In November 2022, the arbitral tribunal gave a decision: Gasum is 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.
Pipeline natural gas deliveries from Russia to Finland are now discontinued for the time being.
However, the long-term LNG supply contract with Gazprom Export is a separate agreement from the natural gas supply contract. Gazprom Export has not made any requests or demands related to the LNG supply contract and thus, Gasum has, at present, no legal basis to take that contract into arbitration.
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