The leased ship should enter into use next winter, and will be located in the Southern Finnish town of Hamina.

According to the Finnish ministry, the facilities needed to receive the vessel will be built in both Finland and in Paldiski, on Estonia's northern coast.

Should Estonia's LNG reception capacity be completed sooner, the floating terminal will initially be located in Estonia.

The 10-year lease will cost approximately €460 million.

The FSRU Exemplar has a capacity of 151,000 cubic meters, or approximately 68,000 tons of liquefied natural gas (LNG).

The floating terminal will be supplied by tankers once every two to three months. The LNG will be regasified at the terminal and thereafter released into the gas network.

According to Gasgrid, the exact timeline will be clarified next month.

Gasgrid held negotiations for the ship in accordance with a mandate from the Finnish government.

The LNG terminal issue is of vital importance to Finland as the Russian majority state-owned Gazprom officially announced on Friday that it will be cutting off gas delivery to Finland at 7 a.m. Saturday.

Finnish gas company Gasum followed by announcing that it would continue supplying its customers with natural gas via the Balticconnector pipeline.

"It is highly regrettable that natural gas supplies under our supply contract will now be halted," Gasum CEO Mika Wiljanen said in a statement issued Friday afternoon according to Finnish public broadcaster Yle. "However, we have been carefully preparing for this situation and provided that there will be no disruptions in the gas transmission network, we will be able to supply all our customers with gas in the coming months."

Earlier this week, Gasum announced that it was refusing to pay Gazprom in rubles as requested early last month, as paying for Russian gas in rubles could violate EU sanctions against Russia.

Finnish Minister of Finance Annika Saarikko said that leasing the floating LNG terminal will allow Finland to break free from Russian gas.

Natural gas accounts for some 5 percent of energy consumption in Finland.

Finland found one first

While initial plans called for Finland and Estonia to lease an FSRU together, after it was agreed that private companies would be establishing Estonia's LNG reception capacity, Alexela and Infortar have been handling Estonia's hunt for a floating LNG terminal.

"We're in negotiations regarding a ship, and actually we know that the Finns are as well," Alexela board member Marti Hääl told ERR on Thursday. "We'll have to agree here soon regarding which of these ships will be coming here this fall."

According to Estonian Ministry of Economic Affairs and Communications spokesperson Kadri Laube, negotiations regarding where the FSRU will be located will continue between Alexela and Infortar, the developers of the project in Paldiski, and Finnish representatives who leased the vessel.

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