Minister: FRSU vessel going to Finland doesn't render our LNG berth useless

Riina Sikkut, Minister of Economic Affairs and Communications.
Riina Sikkut, Minister of Economic Affairs and Communications. Source: Kairit Leibold/ERR

A Liquefied Natural Gas (LNG) facility in Estonia is important for the long-term guarantee of supply in the current security situation, Minister for Economic Affairs and Communications Riina Sikkut (SDE) says, regardless of the fact that a Floating Storage Re-gassification Unit (FRSU) vessel is now heading to Finland with a winter's consignment of LNG, and not to Estonia.

Appearing on ETV politics head-to-head show "Esimene stuudio" Thursday evening, Sikkut said: "Monday's decision [that the FRSU vessel would sail to Finland ahead of the winter] means that the supply security for both Estonia and Finland is guaranteed.

"The last link is in place. There will be sufficient natural gas available in the Baltic and Finnish regions to meet our winter needs. This is what we have been working towards, and we achieved this goal," Sikkut added.

While it finally became clear on Monday that the ship was heading to Inkoo, Finland, rather than Paldiski, Estonia, even as the LNG terminal in the latter location is ready, while in the former it was not, as of Monday, Sikkut noted that by late June it was clear Finland found itself in a different predicament than it had earlier in the year, after the Russian Federation switched off its natural gas supply to that country.

Finland has no natural gas link with neighboring Norway, X, leaving the Balticconnector pipeline linking it to Estonia as the only functioning conduit for natural gas.

Sikkut said: "The agreement concluded in the spring was a very practical one. In Estonia, we argued amongst ourselves and in the end we didn't commence renting an FRSU vessel. The Finns rented their ship for 10 years, for almost half a billion. In such a case, it would be odd to assume that the Estonian government gets to decide where that vessel ends

"However, there was no terminal in Finland completed and Russian gas was still flowing at that time. Estonia is in a good location, and the prerequisites were in place. An agreement was made that in the first year the terminal would go whichever berth to be completed first (ie. from Inkoo or Paldiski – ed.). The understanding was that Estonia's would be the first to be completed - and so it turned out to be - but in the meantime Russia turned off its gas supply [to Finland]."

Another factor is the price of electricity – Finland will likely use natural gas derived from LNG to generate electricity at its power stations, Sikkut said.

The state has not betrayed the private sector, responsible for the bulk of the work in developing the Paldiski berth, she added, adding that should the latter wish to sell the facility to the state, they will be fully recompensed.

Demand for LNG across Europe is growing, the minister noted, and an FRSU vessel can always be brought to Estonia where needed.

Two two berths are an "insurance policy" including, for instance, if Inkoo does not remain ice-free, while the berth being built at Paldiski was the right decision then and now, she added.

Moreover, as recently as late September, the prime minister was continuing to work to try to get the FRSU vessel to dock at Paldiski, while nothing has happened which invalidates the original decision made in spring – by Sikkut's predecessor, Taavi Aas (Center).

Options are also still open for potentially acquiring a stake in the Finnish company responsible for the LNG supply, Sikkut added, though it is unlikely this will be taken up.

Opposition Center Party MPs are planning a vote of no-confidence in Sikkut for Monday, claiming a lack of transparency over the saga and a failure on her part to stand up for Estonia's interests, which Sikkut remained nonchalant about.

"Elections are coming (in March next year – ed.). I've been in office for three months, with a complex portfolio. Three months until a vote of no confidence - a pretty good result," Sikkut, who is a former health minister also, said.

"I am not involved in this 'mud wrestling' on who said what to whom, who wrote what and who the guilty party might be - I think there is no need to rake over that now," Sikkut added, with reference to a media report yesterday that the state had already requested in June that the FRSU not put in at Paldiski.

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Editor: Andrew Whyte, Barbara Oja

Source: Esimene Stuudio

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