Elering: Tallinn LNG Terminal Cheapest Option

Estonian power company Elering has said today that a feasibility study has proven the Tallinn LNG terminal to be the cheapest choice of terminal to supply the Baltic States and Finland.

According to Elering, the feasibility study, undertaken by consultancy company Ramboll Oil & Gas, has shown that the cost of the terminal build could be up to one third less than the cost of other competing LNG terminals. Despite this cheaper cost of construction, Elering said today that the project would still require funding from the EU to cover one third of the cost.

The Tallinn LNG terminal, which is being constructed jointly between Elering, Vopak LNG and the Port of Tallinn authority, is expected to cost approximately €221 million. Additionally, an investment of up to €10 million to connect the terminal to Estonian gas transmission network will be required, Elering says. The terminal would take four years to be completed.

Besides the cost efficiency, CEO of Elering, Taavi Veskimägi, said that the terminal would be advantageous due to its location and its ability to be connected to various gas outlets and supply avenues, including connecting to the planned Finnish-Baltic gas market and the planned Finnish-Estonian gas interconnection, Balticconnector.

"The terminal’s location in the Tallinn area would help bring the security of gas supply in Estonia up to the EU’s required levels, as well as contribute to the development of Finnish gas via Balticconnector," he said.

The terminal project is being planned in a bid to diversify supply away from current sole supplier Gazprom. However, the project still has to compete with other proposed LNG terminals by neighbours Latvia and Lithuania. All three countries say that an LNG terminal, which would supply other Baltic states, would be best suited to each's own country. However, being unable to decide amongst themselves, the countries last November asked the EU to make the final decision as to which was the best project.