Finland prepared in case Russia cuts off gas, emergency committee says

Illustration shows natural gas pipeline, Finnish and Russian flag colours
A model of the natural gas pipeline is seen in front of displayed Finnish and Russian flag colours in this illustration taken April 26, 2022. REUTERS/Dado Ruvic/Illustration

HELSINKI, May 13 (Reuters) - Finland is ready to cope in the event that Russia cuts off its supply of natural gas, the government's emergency preparedness committee said after a meeting on Friday.

Key Finnish politicians had been warned of a possible halt to gas exports by Russia on Friday, Finnish newspaper Iltalehti reported on Thursday. read more

Defence Minister Antti Kaikkonen told reporters he could not confirm the report while the Kremlin said the newspaper report was "most likely a hoax" and reiterated that state-owned gas company Gazprom (GAZP.MM) remained a reliable gas supplier. read more

Gazprom did not reply to a Reuters request for a comment.

State-owned Gasgrid Finland had no indication of any disruption to gas flows on Friday, a spokesperson told Reuters.

"Finland is prepared for a suspension of Russian natural gas imports," the committee said in a statement.

The country imports most of its gas from neighbouring Russia but gas accounts for only about 5% of its annual energy consumption. read more

However, losing that gas supply would mean Neste (NESTE.HE), Metsa (METSB.HE) and other companies in the forestry, chemical and food industries would need to find alternative energy sources or adapt their production.

"Finland seems well placed to replace Russian flows with LNG (liquefied natural gas) imports from elsewhere," Capital Economics said in a note to clients.

"So, while Finland's economy will be hit harder than most other euro zone economies from a broader loss of trade with Russia, the direct effect of a cessation in Russian gas supplies would be small."

Finnish leaders on Thursday said the nation must apply to join the NATO military alliance "without delay" in a historic policy shift triggered by Russia's invasion of Ukraine. read more

Moscow said the move was a threat and warned it was ready to respond. read more

Last week the government said it was prepared for the possibility that Russia might cut off its gas supply in late May as a response to Finland's refusal to abide by Russian demands for payment in roubles. read more

Finland is also connected to the European gas network via the BalticConnector, a Finnish-Estonian pipeline that connects Finland with the Baltics which historically relied heavily on Russian gas but have diversified their supply using LNG import terminals and better connections with western Europe.

Reporting by Anne Kauranen; editing by Gwladys Fouche and Jason Neely

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