Minister of Economic Affairs and Communications Taavi Aas and his Finnish colleague Mika Lintilä agreed that the countries will pool their resources to rent a liquified natural gas (LNG) floating terminal meant to ensure gas supply security.
"The gas supply of both Estonia and Finland depends strongly on Russia, which is why we need have a backup plan and create preparedness for giving up Russian gas. Together with our northern neighbors, we decided that pooling our resources and ensuring both countries' gas supply through a joint LNG terminal to be adopted this year is the most sensible option," Estonia's Minister of Economic Affairs and Infrastructure Taavi Aas (Center) said.
"The war in Ukraine means we need to be prepared for potential gas supply disruptions. A floating LNG terminal is an effective way of having gas supply security, including for industrial needs. I would like to thank the Estonian government for smooth cooperation," Finnish Minister of Economic Affairs Mika Lintilä added.
The plan prescribes both Estonia and Finland constructing necessary mooring jetties and renting a floating LNG terminal between them that could be used on both sides of the Gulf of Finland. The jetties will be built in Paldiski in Estonia and Inkoo in Finland.
The terminal should be moved into the area by this fall and parked at whichever mooring site is prepared to receive it by then. From there, its location would depend on market needs. Having suitable mooring on both sides of the Gulf of Finland will increase the supply security of both Estonia and Finland and add necessary flexibility.
Renting the terminal to cost €10 million a year
The countries will pay for the construction of mooring infrastructure and share the cost of renting the terminal based on consumption volume. The best-case scenario puts the cost of ensuring supply security in Estonia at €10 million. The plan is being realized in cooperation of network operators Elering and Gasgrid.
The agreement provides a quick solution for regional gas supply security. Duration of this cooperation coincides with the terminal's rent period.
Because the Baltic and Finnish region is closely tied to Russian gas deliveries, losing the latter would cost the region half its required supply. Finland consumes roughly 23 terawatt-hours (TWh) and Estonia 5 TWh of gas annually.
The European Union has plotted a course for weaning itself off Russian natural gas as soon as possible and by the end of the decade at the latest.
Editor: Marcus Turovski