Kallas: An Estonian LNG storage vessel should not be fetishized

Kaja kallas.
Kaja kallas. Source: Ken Mürk/ERR

The prospect of Estonia getting its own liquified natural gas (LNG) storage vessel should not be fetishized as the supply of energy is secure without it, Prime Minister Kaja Kallas (Reform) said on Wednesday. Junior coalition parties have called for the state to rent a unit.

Earlier this week it was announced that an LNG storage vessel which will jointly serve Estonia and Finland will dock on the other side of the Gulf of Finland. Terminals and reception capacity have been constructed in both countries.

Politicians from junior coalition parties Isamaa and the Social Democrats are now calling for Estonia to get its own floating storage unit. Access to the vessel still needs to be negotiated with the Finns and it is too late for Estonia to rent a vessel for this winter.

On Wednesday, Kallas commented on the outcome saying it is logical for the unit to stay in Inkoo because Finland uses 14 terawatt-hours of gas each year while Estonia uses 3.5.

After cutting itself off from Russian gas earlier this year, Finland only has one other gas connection, she said.

FSRU Independence at port in Klaipeda, Lithuania. A similar LNG vessel may be planned for Estonia. Source: AB Klaipedos Nafta / CC BY-SA 4.0 / Wikimedia Commons

Estonia has the ability to access the Finns' LNG and if a vessel is not stationed in Paldiski Harbor nothing bad will happen, the prime minister said.

"It is not worth over-fetishizing this ship. The important thing is whether there is security of gas supply, whether there is gas for Estonian companies and people," Kallas told the media at the government's weekly press conference. 

"Our risks can be mitigated by the fact that we actually get gas from the [Balticconnector] pipeline. And in this respect we have an agreement, we have a solidarity agreement with Latvia and Finland, and these things should work. The important thing is that this gas is there," she said.

In May, Finnish grid operator Gasgrid signed a 10-year contract for the rental of the floating LNG storage terminal at the of cost €460 million.

Kallas said Estonia should not act hastily and make any decisions that may be regretted in hindsight.

LNG terminal construction site in Paldiski. Source: Alexela

"At the moment, yes, we don't know, [but] we are making efforts to ensure that our gas supply security is guaranteed this winter. But if we go to buy or lease a vessel for €500 million which has a capacity of 35 terawatts, in a situation where our own consumption is 3.5 terawatts, then believe me, when it turns out in the spring that we did not have a gas crisis, then everyone will come to ask who made such a foolish decision to put public money into it," the prime minister said.

Kallas said Estonia did not pin all of its hopes on the LNG ship and has also built up its national gas reserve. Latvia and Lithuania also have reserves.

Estonia's current gas reserve is 0.65 terawatt-hours.

The government will further discuss the issue on Friday.


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Editor: Marko Tooming, Helen Wright

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