VZCZCXYZ0000
RR RUEHWEB

DE RUEHHE #1199 3351447
ZNY CCCCC ZZH
R 011447Z DEC 06
FM AMEMBASSY HELSINKI
TO RUEHC/SECSTATE WASHDC 2791
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RHEBAAA/DEPT OF ENERGY WASHINGTON DC

C O N F I D E N T I A L HELSINKI 001199 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR EUR/FO/DAS BRYZA, NB, ERA, EB 
 
E.O. 12958: DECL: 11/30/2016 
TAGS: ENRG EPET ETRD EUN FI RS
SUBJECT: ENERGY FROM THE EAST: FINNISH RELIANCE ON RUSSIAN 
NATURAL GAS 
 
 
Classified By: Econ Officer Glenn Lewis for reasons 1.4 (b) and (d). 
 
¶1. (C) Summary: Gasum, Finland,s sole supplier of natural 
gas, has managed to settle into a peaceful coexistence with 
its notorious Russian partner Gazprom.  Although totally 
dependent on Gazprom for 100 percent of its supply, Gasum 
ensures stability through long-term contracts with Gazprom 
which has provided uninterrupted supply with next to no 
political interference for decades.  Nonetheless, Finland 
continues to explore all options, including the proposed 
Balticconnector natural gas pipeline, which would provide 
additional energy security and capacity to Finland.  Natural 
gas represents 11 percent of Finland's overall energy use. 
End summary. 
 
Gasum,s Connection to Russian Gazprom 
------------------------------------- 
 
¶2. (C) Gasum is the sole natural gas provider in Finland and 
100 percent of its natural gas supply is imported from 
Russia.  Russian energy giant Gazprom owns 25 percent of 
Gasum, the Finnish state owns 24 percent, Finnish energy 
company Fortum (also partially government-owned) owns 31 
percent and E.ON Ruhrgas owns 20 percent.  Gasum CEO Antero 
Jannes told econoffs in a November 15 meeting that Gazprom 
has been a reliable supplier of natural gas to Finland for 
over thirty years and that the overall relationship has been 
quite positive.  He acknowledged Russian and Gazprom 
political influence in neighboring countries, but said 
Finland had been largely immune to such interference.  To 
ensure a stable supply of natural gas through 2025, Gasum 
recently negotiated a long-term contract with Gazprom that 
allows for minor price adjustments every three years. 
 
¶3. (C) Jannes said Gazprom has largely been a &hands off8 
shareholder and that Gasum,s business decisions have not 
been influenced by the overall Russian or Finnish political 
climate.  Lobbying is almost unknown in Finland, so Gasum 
does not discuss Russia policy with the Finnish government. 
Also, unlike in some Baltic countries, Gazprom has not placed 
&advisors8 in Gasum,s corporate structure, nor does the 
contract with Gazprom permit them to do so.  Jannes 
attributed this to Gazprom,s and Russia,s desire to have a 
successful business relationship with Gasum.  He acknowledged 
that Finland,s preference to work out differences quietly 
had most likely also contributed to smooth relations.  &We 
are used to living with the Russians,8 Jannes said, smiling. 
 
Increasing Energy Security through the Balticconnector 
--------------------------------------------- --------- 
 
¶4. (SBU) The proposed Balticconnector pipeline would increase 
predictability and security of supply by connecting Finland 
to large natural gas reserves in Latvia and future liquefied 
natural gas (LNG) terminals in the Baltic countries.  The 
natural gas crisis in Ukraine last winter caused Finnish 
consumer confidence in the Russian supply of natural gas to 
drop, creating the right climate for Gasum to push for the EU 
to conduct a feasibility study for a 100 million euro 
pipeline Gasum is considering.  The pipeline would link 
Finland to the natural gas network in the Baltic countries 
thereby increasing the natural gas capacity in Helsinki and 
other southern regions in Finland.  Natural gas consumption 
in Finland is quite low (accounting for just 11 percent of 
overall energy use as compared to over 20 percent in most EU 
countries), but it is a calculated part of a diverse energy 
supply strategy that utilizes natural gas, coal, nuclear, 
oil, biofuels, peat and other alternative energy sources. 
 
Finland,s All Business Approach 
------------------------------- 
 
¶5. (C) Comment: Gasum,s relationship with Gazprom is yet 
another example of the pragmatic, &all business8 Finnish 
approach to energy discussions with Russia.  This 
non-combative style has enabled the Finns to ensure a stable 
natural gas supply from its eastern neighbor.  We should 
expect the Finns to continue to play this non-confrontational 
role with Russia in bilateral and EU-led energy discussions. 
At the same time, Gasum will hedge its bets by looking into 
options such as the Balticconnector. 
WARE