Since the beginning of the war between Russia and Ukraine, European countries have imposed sanctions on Russia in many fields. Russia, in response, said that what it calls "non-enemy" countries should pay Russia for gas purchases with the ruble. On the other hand, European countries are divided on how to act toward Russia's demand. Although some countries named it to blackmail and refused to pay in rubles, countries such as Germany and Italy pointed out after negotiations with the European Union, that they could open a ruble account to continue purchasing Russian natural gas without violating sanctions against Moscow. On the other hand, Russia declared last week that about half of the 54 foreign customers owned by Gazprom PJSC opened a ruble account. Poland, Bulgaria, and lastly Finland refused to comply with this request of Russia and gas flows were halted. The pipeline from Russia recently accounted for about 66% to 75% of Finland's natural gas supply. Russia's gas exports to Finland were already declining from 2018 to this year, when shipments were around 2.6 billion cubic meters. It is a fact that the majority of the natural gas used in Finland comes from Russia, but natural gas only accounts for 5 percent of the country's annual energy consumption. On the other side, Finland is a relatively small customer of Gazprom. Gazprom's exports to Finland accounted for approximately 1% of the company's total sales to Europe and Turkey in the first half of last year.
The Finnish energy company Gasum stated that they are prepared for the movement of Russia. They said they would continue to supply natural gas to their customers through the Balticconnector pipeline, connecting Finland with Estonia. Gas filling stations will continue in regular working order. However, the capacity of the Balticconnector pipeline may not be sufficient to meet demand in Finland. The Finnish government announced that they had signed a 10-year lease agreement with Estonia for the LNG terminal ship from the US-based Excelerate Energy for the coming winter. The country's Finance Minister, Annika Saarikko, stated that the new LNG ship is an essential step toward improving Finland's energy supply security. CEO of Excelerate Steven Kobos stated that Finland and Estonia demand about 3 billion cubic meters per year and that the tanker can deliver 5 billion cubic meters per year. Kobos also said that Excelerate plans to deploy its Exemplar vessel in Finland by the end of this year and that its offshore LNG terminal could replace with Russian natural gas. Currently, the ship is in Argentina and will set sail for the Baltic Sea after winter ends in the southern hemisphere. On the other hand, according to a survey conducted in April and published on May 16, it is seen that around 60% of Finnish people support nuclear energy in the fight against climate change, and only 11% take a stance against it. Finland's renewable and nuclear energy share accounted for 87% of its electricity production in 2021. This rate is expected to exceed 90% by 2023 in Finland.
Another critical case following Russia's halt of gas flow to Finland is Finland's official application to NATO. Finland with Sweden had significantly increased its political support for the western alliance after the invasion of Ukraine. Last week, Finland put aside its historical neutrality and applied for NATO membership together with Sweden. On the other hand, Russia had sternly warned Finland that it would cause a serious mistake with far-reaching consequences if it applied for NATO membership. Both Finland and Sweden are on their way to joining NATO, with their warm approach to US President Joe Biden's proposals. All 30 member states of NATO must be unanimous for Finland and Sweden to join NATO. At this point, Turkey expressed its discomfort with Sweden and Finland about their support to the terrorist organization and gave the first signals that they might have difficulties at the NATO gate. Russian Defense Minister Sergei Shoigu asserted that the Kremlin would respond to NATO expansion by establishing more military bases on Russia's western flank.
From a historical point of view, Finland has spent 104 years in quiet steps around neighbour Russia, with which it has had a land border of approximately 1,300 kilometres since its independence. After the Cold War ended, although Finland joined the European Union and got closer to European democracies, both the country's leaders and the public did not see joining NATO as an option. It was important not to disturb the Baltic Sea region's military balance and maintain good relations with Russia. Russia's invasion of Ukraine was the most significant factor pushing both Finland and Sweden to join NATO. If the two countries join NATO, the border that NATO currently has, which constitutes 6% of Russia's land perimeter, will be extended, allowing the alliance to increase its surveillance in the country's western flank. At the point of how long it will take for them to join NATO, it can be predicted that it will be faster progress than the previous members. NATO Secretary-General Jens Stoltenberg also stated that the two countries meet NATO standards in most areas and that the process can progress quickly. Although it is not possible to give an exact date, it can be thought that this process will take about a year, assuming that Turkey will also say yes to this membership.
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