Plan For Estonian, Finnish LNG Gas Terminals Hits Bump

A LNG terminal in the Netherlands (Reuters/Scanpix)
6/19/2014 11:20 AM
Category: Economy

Estonia and Finland have suffered a minor setback in their plans for proposed paired liquified gas terminals in both nations, linked by a pipeline. 

Officials from both countries said that the European Commission raised some flags after companies involved in the project and its promoters presented their plan for the terminal project to a member of the European Commission in Tallinn on Wednesday. But neither country said they were ready to abandon the paired model. 

"The plan is not sufficient yet," Timo Tatar, director for energy projects at the Ministry of Economic Affairs and Communications, told ERR News.

"The companies involved in the project need to work further to create more synergies between them," he said, referring to the structure of the ownership and the operation of the terminals.

"The companies are now negotiating between them to find those synergies, and then they will submit an amended proposal for the terminal project."

A thumbs-up for the project is needed by the Commission for the plan, which would increase the energy diversification of the two nations, as it will rely heavily on EU subsidies. The estimates for the cost of the project is in the hundreds of millions of euros, perhaps around 1 billion after the cost of the pipeline is added in.

The initial plan was submitted in February by energy companies in the two nations, including Alexela Energia, Eesti Gaas and Gasum. Tatar said that the meeting yesterday was a chance for the Commission to give the plan initial feedback, and an amended terminal proposal can be submitted until August 19.

"The commission supports this project, and now the companies are negotiating. It’s a rather intermediate result, but there was some real progress made as a result of the feedback," Tatar said.

The crisis in Ukraine has spurred EU governments to look at ways at reducing their reliance on energy imports from Russia, although the Finnish-Estonian plan was in the negotiation phase before it began. Estonia and the Baltic states, along with Finland, buy about 10 billion cubic meters of gas annually from the Russian company Gazprom.


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