Gasum Cuts Ties with Gazprom Export on Natural gas Supply, But Long-Term LNG Deal Stays Afloat

Europe: Gasum has declared that it will terminate its Natural gas supply contract with Gazprom Export, effective 22nd May 2023. The decision comes after Gazprom Export demanded payments in rubles instead of euros in April 2022, which led to the cessation of pipeline Natural gas deliveries to Gasum from Russia in May 2022. No pipeline Natural gas deliveries have been made since then.

Gasum refused to comply with Gazprom Export's demand and the companies had a substantial disagreement concerning other demands specified in the contract. Consequently, Gasum took the issue to arbitration in accordance with the terms of the supply contract.

The arbitral tribunal made a ruling in November 2022, stating that Gasum was not obliged to pay in rubles or follow the proposed payment procedure. Additionally, the tribunal directed both Gasum and Gazprom Export to engage in bilateral contract negotiations to resolve the conflict.

Gasum has announced the conclusion of negotiations with Gazprom Export, stating that the parties were unable to resolve the matter within the time frame established by the arbitral tribunal. As a result, Gasum has terminated its long-standing contract with Gazprom Export for the supply of Natural gas.

The parties will continue to work on the contract termination process, and Gasum has stated that it will not provide any further comment on the specifics of the situation. However, Gasum has clarified that its long-term LNG supply contract with Gazprom Export is still valid and in effect.