Estonia and Finland Inch Towards Agreement on Separate LNG Terminals, Joint Gas Interconnector
Estonia and Finland are inching towards an agreement on laying a gas pipeline between the two countries and building an LNG terminals in each country.
According to a statement made by Finnish PM Alexander Stubb and Estonian PM Taavi Rõivas, Finland will build a larger LNG terminal while Estonia will have a smaller one.
According to the Estonian PM, the earliest date of completion for the Balticconnector gas pipeline is 2018. Its tentative price-tag is around €100 million ($125 million).
In early October, the EU rejected a proposal to finance the implementation of a joint Estonian-Finnish LNG terminal project by the Estonian company Alexela Energia and Finland’s Gasum.
“Having a regional terminal would have more benefited from larger quantities of gas instead of having to split it into two or more parts,” Herkko Plit, Director General at Finland’s Ministry of Employment and Economy, told Natural Gas Europe.
Both countries had already reached an agreement early this year on building two separate liquefied natural gas terminals on either side of the Gulf of Finland and a pipeline connecting the two countries, but then the agreement was not signed awaiting the word on the financing from the European Commission.
Analysts have long been saying the region’s gas demand necessitates only one LNG import terminal, in terms of construction costs and gas import prices.
“Security of supply and diverse energy mix in Finland are important elements to our energy policy. Diverse gas supply source will increase both those aspects. Further, Finnish gas market is as large as the Baltic countries’ gas market altogether, so Finnish gas market will define the success of the regional terminal,” Plit insisted.
Asked how the standoff between Russia and West might ill-effect Finland’s energy security - Finland depends 100% on Gazprom gas- the Finnish representative replied “it is now important that we agree on the regional terminal and commence that work. We can influence the future, not the past.”
Finland and the three Baltic states of Estonia, Latvia and Lithuania consume about 10 billion cubic metres of gas per year, all currently supplied by Russia’s Gazprom.
In mid September the Finnish Employment and Economy Ministry announced it is allocating a total of EUR 65.2 million ($81.5 million) in energy subsidies for three liquefied natural gas (LNG) terminals in Tornio, Pori and Rauma regions respectively. These new terminals are expected to significantly reduce the industrial use of fuel oil and liquid petroleum gas in Finland.
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