Since the deadline for the construction of a proposed Liquefied Natural Gas (LNG) terminal in Estonia is just six months away, this requires strong cooperation on the part of all parties, including the state, Martti Talgre, CEO of Infortar, one of the private firms involved in the project, says.
Holding company Infortar is working with fuel company Alexela to construct the facilities at the Port of Paldiski which would receive LNG – natural gas cooled to liquid form for ease of transport – from a floating terminal, a vessel fitted out for the purpose, and while talks involving the economic affairs ministry and state-owned grid distributor Elering ground to a halt last week, a week later, good will can now be found, Talgre said.
He said: "It would normally take a couple of years to build this terminal; we have barely six months. That six months means that all parties, that is, the state, Elering, Infortar and Alexela, must work together very well. As of now that goodwill seems to be in evidence, and we will be able to complete the terminal on time."
Minister of Economic Affairs and Infrastructure Taavi Aas (Center) said the two companies would be going it alone, i.e. would not receive state support.
Aas said: "They are doing it under market conditions, without any additional state contribution, and not even state guarantees. The only task of the state is to ensure the connection of the quay to the mainland and to ensure that the gas reaches the Estonian gas network."
Earlier in the week, controversy arose over claims that Alexela had requested a €40 million state subsidy, which the company denies.
While the price of natural gas continues to rise, amid both the ongoing energy crisis and the need to decouple from dependence on Russian gas, the use of LNG via the terminal will not lead to an additional rise in gas bills, energy expert Marko Allikson says.
Allikson said: "The price of European natural gas for the winter or by the time it can be bought through Paldiski depends primarily on whether Russian flows continue, especially to Germany and the rest of Europe. If they do not continue, prices will rise significantly from today's levels."
The supply is likely to be enough to make up the shortfall once Russian natural gas is out of the equation, Talgre added, with up to three tanker vessels operating.
Another aspect which still needs resolving relates to a join agreement for leasing the LNG floating terminal which Estonia signed at the beginning of this month; whether this procurement goes ahead depends on whether any viable alternative arises, Taavi Aas said.
Aas added that if through-flow of LNG is at around the 30TW-mark, then terminal fees, another sticking point in the discussions, will be relatively small, while the Competition Authority (Konkurentsiamet) will monitor this process, the minister said.
Work has already started on the terminal at Paldiski, while the state has set aside 20 percent of the country's annual natural gas needs as a reserve.
Estonia and Finland are linked by the Balticconnector pipeline, and, via Latvia and Lithuania, to Poland too, while Lithuania already has an operational LNG terminal at Klaipeda.
Editor: Andrew Whyte