Estonia’s Alexela Awaits EU Decision on LNG Funding

Estonia’s holding Alexela Group has not abandoned its plans for a liquefied natural gas import terminal at Paldiski and it believes the project is viable. NGE reported early in February (Estonia's LNG Plans Hit Reality Check) that the company had bowed out as it could not raise the money.

“We are actively preparing for an international construction tender and are waiting for the spring, when the EU will give its final decision on a possible EU funding to the Paldiski terminal through the Connecting Europe Funding,” the company told NGE.

If Estonia and Finland build the BalticConnector linking their two grids, on the Estonian side it will land on the shore at Paldiski, making Alexela’s Paldiski LNG terminal the “only possible supplier of gas” to both markets in the case of a sudden break in gas supply. The terminal planned by Vopak to Estonia’s Muuga does not have this ability, Alexela  said.

Alexela believes that its Paldiski LNG terminal project is the only one to have gone through all the necessary planning procedures, including documentation and risk management. The cost for Paldiski LNG is estimated to be about €344mn, and the EU is asked to contribute 43%. 

There is already an LNG terminal in Lithuania but the three Baltic states have so far not co-operated on its use and it is operating at well below capacity. Its defenders say that the option to import from elsewhere allowed Lithuania to argue for such a big reduction in Gazprom's gas price that the plant has paid for itself.

Linas Jegelevicius