Competition Authority: Preferential status at LNG terminal is problematic

Evelin Pärn-Lee
Evelin Pärn-Lee Source: ERR

Director General of the Estonian Competition Authority Evelin Pärn-Lee said that the terms and conditions for LNG terminal use could be made public in the coming days. The text makes no mention of Estonian or Finnish companies receiving preferential treatment. Such favoring treatment, as agreed upon by the ministers of both countries, may need to be codified in law.

Timo Tatar, the deputy secretary general for energy at the Ministry of Economic Affairs, told ERR's Vikerrado on Tuesday that the document outlining the terms of use for the LNG terminal has been sent for evaluation to Estonian and Finnish authorities. How far along is the work?

On October 4, the Competition Authority received these Finnish LNG terminal regulations. We have now analyzed these terms, formulated our own proposals and contacted the Finnish regulatory agency. We are prepared to put these conditions out for public consultation now.

Could the competition authorities just stamp these conditions, or do they need to be debated in public first?

Absolutely. After all, the whole point of consultation is to give market participants a voice.

When will this consultation begin?

We would be ready to go as soon as possible. We believe it will be either the end of this week or the beginning of next week. However, we would still need to coordinate with the Finnish regulator, as the terminal operator is a Finnish company, these conditions should only be submitted to the Finnish regulator. In a show of good faith, the Finnish regulator has also sent these conditions to us.

Would Estonian coordination be necessary if the ship was in Estonia?

Yes. It is critical to understand that the terminal ship is bound for Finland.

This means that Finnish law applies to the ship. So if an Estonian company uses the terminal service and has a complaint, for example, about the terminal manager or the rules, the Finnish regulator will handle it. Only if the ship was on the Estonian side would the activity fall under Estonian jurisdiction.

Are the rules you received on October 4 essentially the same as the Estonian rules?

Yes. This is not the type of situation where a completely new set of rules is imposed. In fact, these terminals have been in operation before.

However, as I said, Finnish law applies and, in my opinion, this immediately creates a legal risk for Estonian operators. However, in principle, I do not see any conflict with Estonian law in these rules as such.

On Monday, the Estonian and Finnish ministries of economy agreed to offer Estonian and Finnish companies priority access to the terminal. As far as I know, the terminals also operate under the free market norms of the EU. Do the laws of competition permit such an advantage?

I would begin by saying that there are no advantages written into the conditions as they currently exist.

Regarding the fact that we are contemplating this type of favoring of certain operators, I believe that, not only from the perspective of competition law, but also from the perspective of the rules of the European Union's internal market, such favoring, which is the market restriction, would be problematic.

Nonetheless, it should be noted that for the Klaipeda terminal in Lithuania, for example, the Lithuanian law has stipulated that particular types of operators be given preference and I do not see any direct contradiction in a situation in which the Estonian legislature would also decide to favor someone in order to maintain either supply security, the public interest or some constitutional right or principle.

I would like to emphasize, however, that the current system is still structured so that this terminal is a Finnish terminal and falls within Finnish jurisdiction.

If we were to adopt such a preference at the level of the law, it might be applicable just in Estonia. The ship does not arrive in Estonia today. Moreover, I am not aware of the Finnish legislator having written any such preference into Finnish law. However, it is not impossible for consensus to be reached.

I am aware of the little time difference. Perhaps you were given a document to study, and then the ministers agreed that such a move would be made. Who knows if it makes sense to discuss this document in a public consultation when major changes are still possible.

Both processes, I think, could run concurrently. After all, it is not only Finnish companies that are market participants, but also Estonian businesses that are still hoping to gain access to this terminal. And I believe this is the best place for them to communicate their thought on the matter.


Follow ERR News on Facebook and Twitter and never miss an update!

Editor: Kristina Kersa

Hea lugeja, näeme et kasutate vanemat brauseri versiooni või vähelevinud brauserit.

Parema ja terviklikuma kasutajakogemuse tagamiseks soovitame alla laadida uusim versioon mõnest meie toetatud brauserist: