Alexela: State requested in June that LNG vessel not come to Paldiski

LNG terminal construction site in Paldiski.
LNG terminal construction site in Paldiski. Source: Alexela

The state asked two private sector companies in June not to bring a Floating Storage Gassification Unit (FSRU) to the Estonian coast, investigative weekly Eesti Ekspress reports. News that the FSRU will be sailing to Finland instead has prompted a vote of no-confidence in a current government minister.

Fuel retailer Alexela and Infortar, parent company of Eesti Gaas, were planning to rent an FSRU for the provision of Liquefied Natural Gas (LNG) to a berth, at the time under construction, now finished, at Paldiski, west of Tallinn.

However, Eesti Ekspress reports (link in Estonian) that the state requested that they not bring the FSRU to Estonia, with then Minister of Economic Affairs and Communications Taavi Aas (Center) one of those making that request.

Aas' party, Center, today tabled a motion of no-confidence in Aas' successor as minister, Riina Sikkut (SDE), saying she had failed to stand up for the interests of the Estonian state and had not acted in full transparency on the FSRU.

Gas grid distributor Elering CEO Taavi Veskimägi and the deputy secretary general for energy and the Ministry of Economic Affairs, Timo Tatar, were also behind the request, Eesti Energia says.

The issue was one of compatibility of vessel and quay, the paper reports, though Aas told the publication he had no recollection of making the request.

"In June, I wasn't even a minister any more. We did talk about it, that they (ie. the ensuing administration) should negotiate with the Finns on how to use the quays," he said.

The seven Center Party ministers then in office with the Reform Party, including Aas, were dismissed by Prime Minister Kaja Kallas (Reform) on June 3.

Taavi Veskimägi said that the issue did not concern Elering, since the company's task was to set up the connection between the quay and the national gas pipeline system, whereas the connection between the vessel and the quay was not Elering's responsibility.

Alexela board member Marti Hääl said that the time window has passed for Estonia to rent any FSRU vessel in time for winter, and would likely cost around a million US dollars per day in any case; in spring the vessel Alexela and Infortar had in mind will be available for around US$130,000, he said, according to Eesti Ekspress.

Sikkut announced this week that the FSRU en route for the region will sail to Inkoo, Finland, while an agreement is in place for Estonia to receive preference in terms of LNG supply.

Re-gassified LNG can pass in either direction between the two countries via the Balticconnector pipeline.

While the Paldiski facility was ready last month, ahead of schedule, Inkoo's is still not finished.

A deal signed between Aas and his Finnish counterpart, Mika Lintilä, in late April provided for berths to be built on both sides of the Gulf of Finland, ie. at Inkoo and at Paldiski, either of which could host the vessel, with the exception of this winter, when whichever terminal was ready first (ie. Paldiski as it transpired) would host the ship.

Setting up LNG facilities has been discussed for around a decade-and-a-half in Estonia, but minds were concentrated by Russia's invasion of Ukraine and the need to decouple from Russian gas supplies.

An existing FSRU has been located at Klaipeda, Lithuania, for several years.


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Editor: Andrew Whyte

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