Baltic Connector financing agreement signed

Signing the Baltic Connector financing agreement, Brussels, Oct. 21, 2016. (Riigikantselei)
10/21/2016 12:27 PM
Source: BNS
Category: Business

State-owned transmission system operator Elering, Finnish state-owned Baltic Connector Oy, and the European Commission signed the agreement on Friday on the European Union co-funding for the Baltic Connector gas pipeline project.

The EU will provide 75% of the funding, or €187m.

The agreement precedes tenders for the construction of an underwater pipeline between Estonia and Finland, and in all probability construction will begin in 2017, Elering said.

The offshore section of Baltic Connector will be built jointly by Elering and Baltic Connector Oy. “An agreement with a pipeline procurement and design consultant is about to be signed. We will start the construction tender as soon as its details are agreed on with the Finnish partner,” Elering CEO Taavi Veskimägi said on Friday.

The on-shore sections of the pipeline will be developed separately by each party. Estonia is preparing a tender to find a consultant, and will start the construction tender immediately after choosing the consultant.

The co-financing agreement was signed by Veskimägi, head of Baltic Connector Herkko Plit, and director of the EU’s Innovation And Networks Executive Agency (INEA) Dirk Berckers. European Commission president Jean-Claude Juncker, Estonian prime minister Taavi Rõivas, and Finnish prime minister Juha Sipila were present also.

Baltic Connector, at a total cost of €248m, will transport natural gas in both directions. For this, compressor stations will be built at both ends of the pipeline. The planned capacity of the pipeline is 7.2 million cubic meters per day, which means it will meet Estonia’s total need even on the coldest winter days.

In parallel with the construction of the 150-km Estonian-Finnish pipeline, gas transmission infrastructure in southern Estonia will be updated to improve the gas interconnection between Estonia and Latvia.

The construction of the Estonian-Finnish gas interconnection will be completed by 2020.

Editor: Dario Cavegn

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