Attempts to reduce Estonian and Finnish dependence on Russian gas have suffered a setback this week with the European Commission failing to back the joint LNG terminals project by Alexela Energia and Finnish energy company Gasum. Estonian Prime Minister Taavi Rõivas said the LNG project will continue nevertheless.
Finland and Estonia were in talks with the European Commission to build a separate terminal on each side of the Finnish Gulf with a pipeline connection between them. The Finnish Economy Ministry said that the building of a regional LNG terminal will be postponed for an unknown period of time, reports ETV's "Aktuaalne Kaamera."
The representatives of both companies, both countries and the European Commission met on Tuesday and agreed that there is suitable solution within the context of the formerly hoped for joint enterprise. Pipeline between Estonia and Finland, and terminals on each end are a necessity but the parties are unable to reach an agreement. The funds are there but the head of the Ministry of Economic Affairs and Communications' Energy Department Timo Tatar said although discussion started already in February 2014, the Finnish side is lagging behind with necessary preparations and so a joint project cannot be submitted to the Commission.
"The dates that were given back then do not hold. And neither does the location that was proposed; there were very specific talks of Inkoo [around 60 kilometers west of Helsinki] as the location of the regional terminal. The location has become much more vague. Today the Finnish say that they are still looking for a suitable location. These are, sadly, objective facts," Tatar said.
The director of the energy department of the Finnish Economy Ministry Esa Härmälä said the terminal's location is of secondary importance at the moment, and the three-stage plan proposed by the European Commission was rejected by the Estonian government.
"An ideal solution would be something close to the one proposed by that European Commission that was on the table in Estonia a few days ago, and which the Estonian government rejected. First, a small terminal in Estonia, the capacity volume of which would be enough to satisfy Estonian energy security needs. Secondly, the Balticonnector pipeline and the piping on the shore. And thirdly, a regional terminal in Finland," Härmälä said.
Härmälä said she does not contest the fact that the building of a terminal in Estonia would be the fastest solution. However, it would make more economic sense to have one in Finland, which has a larger market.
This is a question of national energy security, said Tatar, and it is in the interest of the state that the pipeline and the regional terminal will be built, and built sooner rather than later, on this side of the Gulf of Finland.
Estonian Prime Minister Rõivas said the government will continue to prioritize the efforts to cut Estonia's dependence on Russian gas and build up alternative sources of gas supply.
"At present there is no agreement between Estonian and Finnish companies regarding the LNG terminal. I do not think this implies that there is no way a terminal can be built. I believe there are opportunities to build a LNG terminal in our region nonetheless," Rõivas said.
The Prime Minister said Estonia is a better location for a regional terminal also for the reason that the preparations for its construction have advanced far beyond those in Finland. "We must, nevertheless, respect the views of the Finnish, who say Finland would be the best location."