Chronology of events at LNG terminal sparks debate at Riigikogu committee

Marti Hääl and Timo Tatar.
Marti Hääl and Timo Tatar. Source: Siim Lõvi/ERR

Alexela board member Marti Hääl and Timo Tatar, the deputy secretary general for energy, clashed on Friday during an extraordinary session of the Riigikogu State Budget Control Select Committee.

Hääl emphasized that the private sector offered to help the government in March. "At the government meeting on March 31, it was decided that this was necessary, and our investment decision, as well as the first significant orders, were made on March 31," Hääl explained.

"There were two requirements. The first was the political risk associated with Russian gas, i.e., it was obvious that if Russian gas became attractive again, this market-based rationale would collapse.
The second step was to ensure that when the ship arrived at the quay, there was a pipeline and market connection, as well as a specific date and responsible party at the port, quay and terminal," Hääl continued.

"The government should not compete with the private sector on the same issue, but this is exactly what happened. The private sector's risk increased after the two governments decided to charter the ship themselves. Now we were already competing with the Estonian and Finnish state and taxpayers' money," Hääl said.

Hääl also said that by the beginning of June, Alexela had found a second LNG ship and only a signature was missing. "The question was whether we could enter the pipe and market if the Finns rented a ship. We did not receive a guarantee from the state, so we gave up the lease and our task changed. We were merely left with the task of completing the harbor by the end of October, with a buffer time," Hääl continued.

This, however, had two conditions: the €38 million provided to the Estonian Stockpiling Agency (Eesti Varude Keskus, or ESPA) by the government; "the second condition was that if we were the first to build the infrastructure, we would keep the ship for at least a year because it had been agreed between the countries that the ship would go to the country that finished it first. This was significant to us because the money given to the stockpiling agency would have only covered roughly two-thirds of the private investment in that project, leaving us with the remaining investment costs," Hääl said.

"Today, it is clear that we do not have that option, and the saga has come to an end. We can now sell it (the quay - ed.) to the state at a loss of about €10-12 million if we can reach an agreement with the state on the amount that the state allocated to the stockpiling agency (subsidy to private sector of €38 million - ed.)," Hääl said.

"This is the main thrust of our understanding of the situation. We are clear about the fact that we are not deceiving or scamming anyone, and we have been consistent in our vision and can prove for it if necessary," he added.

Tatar: The initial agreement, however, was between countries

Timo Tatar said that Estonia and Finland decided to jointly address the issue of gas supply security before Alexela and Infortar offered to construct the necessary facility.

"Private companies came forward with an offer to build a quay, rent a ship and do it with their own money after the memorandum between Estonia and Finland was signed and the ship was ordered by the Finns," Tatar said.

"The government's first decision was that Estonia needed LNG reception capacity to deal with risks to gas supply security. As a result, Estonia and Finland reached an agreement in early April to jointly address the region's gas security concerns.
In April, the agreement between Estonia and Finland was also reached. In April, Elering and the operators negotiated for a long time about who would build the quay. Elering proposed purchasing the quay from the companies and, if necessary, constructing it. These discussions never came to fruition. After Estonia and Finland had already signed an agreement, the private sector came forward with a proposal in May, stating that they were willing to build the quay, bring the ship, and finance it all themselves, and that they urgently needed a market and pipeline connection. Elering is still building this pipeline connection. However, it became clear in June that the private sector was unlikely to order this vessel," Tatar explained his vision of events.

"While it was clear that the private sector was unlikely to bring a floating terminal here, the state needed to get the berths and quays ready for the autumn season anyway. The state then offered, and continues to offer, a quay buy-out option that would compensate operators for the costs incurred so far," Tatar added.

Hääl: Tatar's chronology of events is inaccurate

"Unfortunately, the reality is nothing like what Timo Tatar describes. I am able to provide documented evidence, but for the time being I will limit myself to saying that if anyone is interested, they may examine the press conference of the private operators on April 13, where we already came out in the open that we were leasing our own vessel, and on 9 June Gasgrid Finland did so," Hääl responded to Tatar.

"The chronology is reversed. The private sector emerged first with the offer, then the government stepped in and seized our enterprise. I can prove it, and I strongly advise against attempting to demonstrate the opposite," Hääl added.

Hääl also said at the construction of the Pakrineeme quay is advancing on schedule. "The construction will be completed by the end of October, with the last concrete pour taking place on Monday and all necessary equipment already on site. We will keep our promise," Hääl said.

Minister of Economic Affairs and Infrastructure Riina Sikkut and Chair of the Board of Elering Taavi Veskimagi both agreed that the quay's completion is critical. Although the quay was built specifically for the LNG ship bound for Finland, both parties confirmed that it can be modified if necessary.

Hääl explained that the quay has been built to accommodate all LNG standard carriers - both floating terminals and LNG vessels. 

Tõnis Mölder (Center), the chair of the state budget control select committee, suggested to convene a new meeting of the committee already on Monday and to invite Prime Minister Kaja Kallas to the session.


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Editor: Kristina Kersa

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