COPENHAGEN, Denmark (AP) 鈥� Russia will cut off natural gas to Finland after the Nordic country that this week refused President Vladimir Putin's demand to pay in rubles, the Finnish state-owned energy company said Friday, the latest escalation over European energy amid the .
Finland is the latest country to lose , which is used to generate electricity and power industry, after rejecting Russia's decree. late last month but had prepared for the loss of natural gas or are getting supplies from other countries.
Putin has declared that in state-owned Gazprombank, one to pay in euros and dollars as specified in contracts and another in rubles. Italian energy company Eni said this week that it was 鈥渟tarting procedures鈥� to open a euro and a ruble account.
The European Commission, the European Union's executive arm, has said the system does not violate EU sanctions if countries make a payment in the currency listed in their contracts and then formally signal that the payment process is concluded. But it says opening a second account in rubles would breach sanctions.
That's left countries scrambling to decide what to do next. Analysts say the EU stance is ambiguous enough to allow the among the 27 member countries 鈥� but losing major European customers like Italy and Germany would cost Russia heavily. It comes as Europe tries to to avoid pouring hundreds of millions into Putin's war chest each day but from scarce worldwide supplies.
Finland refused the new payment system, with energy company Gasum saying its supply from Russia would be halted Saturday.
CEO Mika Wiljanen called the cutoff 鈥渉ighly regrettable.鈥�
But 鈥減rovided that there will be no disruptions in the gas transmission network, we will be able to supply all our customers with gas in the coming months,鈥� Wiljanen said.
Natural gas accounted for just 6% of Finland's total energy consumption in 2020, Finnish broadcaster YLE said. Almost all of that gas came from Russia. That pales in comparison to big importers like Italy and Germany, which get 40% and 35% of their gas from Russia, respectively.
According to Finland's Gasum, Russian state-owned energy giant Gazprom said in April that future payments in its supply contract must be made in rubles instead of euros.
The cutoff was announced the same week that Finland, along with Sweden, applied to join the NATO military organization, that could rewrite Europe鈥檚 security map.
The government in Helsinki said Friday that it had signed a 10-year lease for a floating liquefied natural gas terminal in the Gulf of Finland and that necessary port structures will be built along the coasts of the Nordic country and Estonia, Economy Minister Mika Lintila said in a statement.
It 鈥渨ill play a major role in securing gas supplies for Finland鈥檚 industry,鈥� Lintila said. The vessel should be ready to operate by next winter.
Finland and Estonia have been cooperating on renting the LNG terminal ship, which will provide enough storage and supply capacity to allow Russian gas to be abandoned in the neighboring countries, said Gasgrid Finland, the transmission network company. A gas pipeline between the neighbors will make it possible to import gas from the Baltic states instead of Russia.
Meanwhile, Italian company Eni said Tuesday that it was moving to follow Putin鈥檚 decree 鈥渋n view of the imminent payment due in the coming days鈥� but did not agree with the changes.
Italian Premier Mario Draghi has said he believes it is a violation of the contract, and has called on the European Commission to make a ruling so companies know if compliance violates sanctions.
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AP writer Colleen Barry contributed from Milan.
Jan M. Olsen, The Associated Press
