Nordic energy company Gasum has terminated the long-term natural gas supply contract with Russia’s Gazprom Export while the long-term LNG supply contract between the two companies remains in place.
On 22 May 2023, Gasum announced its decision to terminate the natural gas supply contract following Gazprom Export’s demand from April 2022 that the payments agreed in the supply contract should be paid in rubles instead of euros. Gazprom Export ceased the pipeline natural gas deliveries to Gasum in May 2022 and there have not been any pipeline natural gas deliveries from Russia since then.
Gasum did not accept Gazprom Export’s demand and 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 award in the matter according to which 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.
Gasum said that the negotiations with Gazprom Export have now ended and the parties were not able to resolve the situation within the period defined by the arbitral tribunal. Therefore, Gasum has terminated the long-term natural gas supply contract with Gazprom Export.
The parties will continue to finalize the details of the contract termination. Gasum noted it will not comment on these details of the contract termination.
The company added that the long-term LNG supply contract with Gazprom Export remains in place.