Finland’s gas importer and distributor Gasum has ended its long-term pipeline gas supply contract with Gazprom Export, an export affiliate of Russian gas giant Gazprom.

The termination follows months of talks between the two companies — ordered by an international arbitration chamber in Stockholm, Sweden, in November — after Gasum refused to accept Gazprom Export’s demands to be paid in roubles rather than euros.

“The negotiations between Gasum and Gazprom Export have now ended. The parties were not able to resolve the situation within the period defined by the arbitral tribunal and therefore, Gasum has terminated the long-term natural gas supply contract with Gazprom Export on 22 May 2023”, the Finnish company said.

“The parties will continue to finalise the details of the contract termination,” Gasum said, adding that another long-term deal with Gazprom for the delivery of liquefied natural gas from the Russian company’s small scale Portovaya LNG plant on the Russia’s Baltic Sea coast remains in force.

The Russian company responded: “Gazprom Export confirms receipt of a notice from the Finnish company Gasum about the termination of a long-term contract for the supply of pipeline gas. The company is conducting a legal analysis of further steps in this matter.”

Gasum has not specified the volume of contracted Russian pipeline gas, however, Gazprom Export said earlier that it delivered almost 1.5 billion cubic metres of gas to Finland in 2021.

The end result of the disagreement is being closely watched in Bulgaria and by other Gazprom Export customers in Europe that had refused to agree to the change in the gas payment scheme.

The change was pushed on them last year by the Russian giant after Russian President Vladimir Putin decided to retaliate against European states that introduced sanctions against the country and its corporations following the invasion in Ukraine in February 2022.

Gazprom terminated pipeline gas supplies to those European customers which did not agree to change their payments.

Gasum said: “In April 2022, Gazprom Export presented Gasum with a demand that the payments agreed in the supply contract should be paid in roubles instead of euros. Gasum did not accept this demand. According to the [arbitration] award, Gasum was not obligated to pay in roubles nor through the proposed payment procedure.”

The award had also called for Gasum to make an outstanding payment of about €300 million ($337 million) for gas delivered from when Gazprom first demanded the payment change and the date when the Russian company halted supplies.

The court has specified that Gasum should make this payment in euros, not in roubles.