Government supports having an LNG terminal in Paldiski by fall

FSRU Independence at port in Klaipėda, LIthuania. A similar LNG vessel may be planned for Estonia.
FSRU Independence at port in Klaipėda, LIthuania. A similar LNG vessel may be planned for Estonia. Source: AB Klaipedos Nafta / CC BY-SA 4.0 / Wikimedia Commons

The Ministry of Economic Affairs and Communications has been tasked with making sure the city of Paldiski has the capacity to receive liquified natural gas (LNG) in the fall of 2022. Negotiations for a regional terminal need to continue with Latvia and Finland.

Prime Minister Kaja Kallas (Reform) said on Thursday that Minister of Economic Affairs and Infrastructure Taavi Aas (Center) was been given a mandate to take steps necessary for ensuring Paldiski has the capacity to receive LNG.

"We are working toward rendering the region independent from Russian gas supplies before the year is out," the PM said.

Kallas had previously criticized Aas for leaving the matter of the terminal at the last minute.

The economy minister said via a press release that the government's Thursday decision covers launching preparations for a suitable mooring jetty in Paldiski and connecting it to the Balticconnector pipeline.

"The goal is to allow a terminal to be set up by as early as November," Aas said.

Estonia needs to continue negotiations with Finland and Latvia in terms of what type of terminal is needed as both countries' need for gas is much greater than Estonia's.

"The investment volume is €500 million, which is a lot of money, and we should determine whether out interests align with those of Latvia and Finland. Why? Because Estonia's annual gas consumption is 5 terawatt-hours (TWh), while it is 30 TWh for Finland and 14 TWh for Latvia," Kallas said.

The PM added that the supplementary budget holds funding for an LNG terminal, while specifying an exact sum will require further information from the economy ministry.

"The hope today is to have a floating terminal up and running in six months for which we will have to cooperate with neighbors. They have a greater need for gas than us but lack such a uniquely suitable location and the opportunity to get it done in such a short time," Minister of Public Administration Jaak Aab (Center) said.

Members of the government have previously said that Estonia should construct a regional LNG terminal as the country's own gas consumption is too modest to warrant building one just for Estonia.

Finland should launch the stationary Hamina LNG terminal in fall that is expected to cover a third of the Finns' gas needs in a few years' time.

The European Union has decided to shake its dependence on Russian gas by the end of the decade at the latest. The geopolitical situation has heightened the risk of disruptions to gas supply from Russia even before that time. Latvia, Estonia and Finland would currently lose 45 percent of annual consumption were Russia to discontinue deliveries, most of which concerns Finland.


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Editor: Marcus Turovski

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