Russia's Gazprom said on Saturday it had halted gas exports to neighboring Finland due to a dispute over the payment system, confirming what Gazgrid Finland, which operates the Finnish gas transportation system, said earlier.
For its part, the Finnish Gas Systems Operating Company said that Gazprom today halted gas exports to Finland, in the latest escalation of a dispute with Western countries over the way to pay energy payments.
Gazprom is demanding that European countries pay for gas in rubles because of the sanctions imposed on Moscow for its war on Ukraine, but Finland refused.
"Gas imports through the entry point of Imatra have stopped," and Imatra is the entry point for Russian gas into Finland, "Gazgrid Finland" said in a statement.
On Friday, the state-owned Finnish company, "Gazum", said that Russia's Gazprom had been alerted to the cessation of flows as of 04:00 GMT this morning.
"Gazum" also confirmed today the halt in supplies, and said in a statement, "Natural gas supplies to Finland have stopped."
"Starting today and during the upcoming summer season, Gazum will supply its customers with natural gas from other sources through the Baltic Connector pipeline," she added.
The Baltic Connector line connects Finland to the gas network of neighboring Estonia.
On Friday, Gazprom said gas flows would be halted because Gazum had not complied with new Russian rules that require payment for gas in rubles.
The Russian ruble is flying high
Meanwhile, the value of the Russian currency rose to a 7-year high against the euro in trading yesterday, with more foreign companies complying with Russian President Vladimir Putin's demand to switch to paying in rubles for natural gas.
The ruble jumped as much as 9% against the euro, its strongest level since June 2015, and rose 6.6% against the dollar, 59.18 rubles in Moscow trading, before trimming some of its gains in morning trading today.
The ruble became the best performing currency in the world this year.
Capital controls and a collapse in imports against rising energy prices have made the ruble about 20% stronger than it was before the military operation in Ukraine about three months ago.
The Russian Central Bank gradually eased restrictions on money markets, but the ruble has continued to appreciate, which could become a problem for Russia's budget, as the bulk of the country's revenue comes in the form of foreign currencies.
These indicators come two days after Russian Deputy Prime Minister Alexander Novak revealed that about half of the foreign companies that concluded gas supply contracts with the giant "Gazprom" company have opened accounts in rubles to pay their payments, noting that there are 54 companies linked to contracts with "Gazprom Export".
In response to the freezing of about $300 billion of Russia’s foreign currency reserves abroad, the Kremlin last month approved a decree introducing a new procedure for paying for gas in two stages, with a payment to Gazprom Bank’s account first in euros or dollars, and then transferring to rubles in an account A second opens in the same banking institution.