The LNG floating terminal jointly leased by Estonia and Finland left Argentina for Europe last week and will be docked either in Paldiski or Finland, depending on where work is completed first. According to Martti Talgre, the managing director at Infortar AS, there should be no doubt at this point that the ship will arrive in Paldiski, as Estonia will have reception capacity sooner.
Elering, the Estonian transmission system operator, and Gasgrid, the Finnish equivalent, are both preparing for the arrival of the LNG offshore terminal.
The two governments have agreed that the Exemplar, a floating storage and regasification vessel (FSRU) that is currently en route from Argentina, will be docking in the port where receiving capacity will be available sooner.
Martti Talgre, the managing director at Infortar AS, which is constructing a terminal in Paldiski alongside Alexela, told ERR that there is no longer any doubt that the ship would arrive in Paldiski.
"Looking at the current situation, it seems to be a done deal – construction in Paldiski is moving faster," he said.
Talgre explained that the terminal consists of three components: the dock, the ship and the gas network link.
Both companies Alexela and Infortar have made every effort to meet the deadline for delivering the works.
There were 125 concrete trucks on the Paldiski dock last week, and work is essentially going around the clock on land and at sea.
"This is unprecedented pace for port construction," Talgre said. "And since the agreement is in place and all parties meet their deadlines, there should be no doubt today that Estonia will have its reception capacity ready sooner and we will see a so-called white ship in Estonia."
Both the Estonian and Finnish terminals are linked to the Balticconnector, a natural gas pipeline connecting the two nations. In terms of capacity, it does not matter which country Exemplar arrives in, as the pipe is the same size on both sides of the Baltic Sea.
"However, as far as we are aware, the conditions at the Port of Inkoo are considerably more difficult, particularly during the winter and in cold seas. Only a few vessels would have access to Inkoo and the availability of such ice-class tankers is extremely limited at present. The economic considerations favor Paldiski because, from the perspective of the gas user, Paldiski is a more secure and less expensive route," Talgre explained.
Talgre said that the Latvians are also interested in the Paldiski terminal as they are looking forward to balance their gas flows between Klaipeda and Paldiski terminals. Latvians currently own the region's biggest gas storage facility, Talgre added.
Terminal ensures supply security, not low costs
The development of an LNG terminal does not necessarily indicate a drop in gas prices, which are now on the rise.
The price of U.S. LNG contracts for delivery in November, December and January reached a 14-year high last week.
Talgre said the price of natural gas is already determined by the price of LNG and the terminal's completion will ensure supply security. However, under certain conditions a price reduction is also feasible, he added.
Timo Tatar, the deputy secretary of state for energy at the Ministry of Economic Affairs, said late last week that when the Exemplar would reach the Gulf of Finland in late October, its LNG tank could already be full.
At this stage it is unknown whether the cargo is there, but even if that would be the case, Tatar explained, it would not be intended for Estonian consumers.
Talgre said it is up to Elering and Gasgrid to comment on any potential cargo.
"The truth is that a terminal is more than just hardware; it is also software, so to say, i.e. people, contacts, contracts, promises, as well as service in general. The terminal's functionality, supply security and safety are all dependent on this," he said.
Ain Köster, Elering's communications manager said that their responsibility is to construct the pipeline to Paldiski, but they were unable to provide information regarding the loading of the ship.
The Exemplar was leased for ten years in order to regasify liquefied natural gas (LNG) for Finland, Estonia and other Baltic nations. The FSRU can regasify more than five billion cubic meters per year.
Editor: Kristina Kersa