A Floating Storage Regasification Unit (FSRU) due to supply both Estonia and Finland with its Liquefied Natural Gas (LNG) requirements this winter will be moored off the coast of Finland, Minister for Economic Affairs and Communications Riina Sikkut (SDE) said on Monday, ending weeks of speculation about which side of the Gulf of Finland the vessel would berth at.
Sikkut said it had already been clear to her when she took office in mid-July that the FSRU would be go to Finland.
"Today we really reached an agreement [on this]," Sikkut told ERR on Monday after a meeting with her Finnish counterpart Mika Lintilä.
"At the same time, Estonia will complete its quay and pipeline connection earlier, and our strategic interest would undoubtedly be for the ship to be here. We could not be the first to raise our hands to say, okay, go ahead and this ship," the minister said.
"After all, everyone is polite and grown-up people and they understand that the spring agreement was that the ship will go to this quay for the winter, whoever is ready first. And this is an awkward situation when you have to change the agreement beforehand, and it was an awkward situation for the Finns," the minister continued.
"This means that without a doubt, Finland has no protectionist instinct or desire to limit the LNG volumes coming to Estonia. Rather, the question is how we can resolve the situation in the light of this decision so that the gas supply security of both countries is correctly guaranteed," she added.
The agreement also contains a clause that Estonian gas sellers get the preferential right to buy a certain component of gas from each LNG ship, to be sold in Estonia.
Finland had noted that with the switching off of Russian natural gas on the Russian side, leaving them with only one gas supply pipeline, the undersea Balticconnector, which links the two countries, while the larger size of gas-powered power stations, up to 600MW in capacity, which Estonia's northern neighbor has, in the light of electricity prices, was another consideration, Sikkut said.
In the meantime, the Finns need to ensure their FSRU berth at Inkoo, on the South coast, is finished in time and that measures are taken to ensure that the port remains ice-free through winter, Sikkut said.
The Inkoo terminal is due to be completed in mid-December, meaning LNG – re-gassified on land and then piped to suppliers, can start flowing in the new year, Sikkut said.
Estonia's LNG berth at Paldiski was completed ahead of schedule last month.
The need to decouple from Russian natural gas supply prompted a search for alternatives, with LNG an obvious option for both Finland and Estonia.
Infortar: We haven't considered a scenario where no FSRU arrives at Paldiksi
Martti Talgre, CEO of Infortar, a holding company whose interests include gas supplier Eesti Gaas, his company along with fuel retailer Alexela constructed the Paldiski LNG berth on the order of the state and with the knowledge that an FSRU vessel would come to Estonia.
"From the springtime until the present, we had been assured that if we get the port ready by the deadline, the ship would also come to Paldiski. All our efforts so far have been based on this," Talgre said, expressing disappointment that the state had apparently reneged on this.
"We hope that the state will keep the rest of the promises made during these negotiations and take responsibility for them. We have not taken into account such a scenario that an LNG ship would not come to Paldiski at all," Talgre went on.
Reinsalu: Issue needs to be clarified immediately
The government has not discussed the FSRU being moored in Finland, Minister of Foreign Affairs Urmas Reinsalu (Isamaa) said on Monday afternoon.
He said the whole government is responsible for energy issues.
"The government has not discussed this issue and I think it is definitely important to do so as soon as possible," he wrote on social media.
The minister said the issue is not the sole responsibility of the Minister of Economic Affairs and is rather an issue of Estonia's national energy security. This means the entire government is responsible for the decisions made.
"This issue needs to be clarified immediately," Reinsalu said.
Editor's note: This article was updated to include comments from Infortar's Martti Talgre and Minister of Foreign Affairs Urmas Reinsalu.
Editor: Andrew Whyte