Kallas: Private companies jacking up price of Paldiski LNG quay

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

Prime Minister Kaja Kallas (Reform) said that private companies Alexela and Infortar might have started a new dispute with state-owned Elering over bringing the Floating Storage Regasification Unit (FSRU) vessel to Paldiski because they want more money from the state for the quay's construction.

"I believe, and this is entirely my opinion, based on my long experience working with Marti Hääl and my familiarity with some of the strategies, the plan is to drive up the price," Kallas said on Tuesday's episode of Vikerraadio's "Stuudios on peaminister."

She explained that the state is now actively negotiating the purchase of the Paldiski quay with the companies using its right of first offer.

"We wish to purchase this quay at its construction cost. However, the company is keen about proving that their business was affected, and since they cannot bring the ship, the cost is higher and the state must pay more. This is how I interpret the current situation and why this type of quarrel was now necessary," Kallas said.

Kallas criticized the press for only focusing on Alexela and Infortar's claims and ignoring the entire Paldiski LNG saga from the beginning.

Kallas denied Elering's blame for not installing the inter-connector. Elering built the LNG infrastructure to meet the Finnish company's FSRU connection requirements and parameters, she said, adding that the Finnish Inkoo-bound vessel has the inter-connection link pre-installed. Alexela and Infortar's Paldiski-bound FSRU vessel is different; it does not have the connection equipment on board.

Throughout the summer, Kallas went on saying, private companies were asked if they intended to bring a ship themselves, to which they all responded no, and also said that they would not apply to participate, because it would not make economic sense for them.

"On November 11, however, Alexela said that they want to bring the ship in and for that the inter-connection is also required. /.../ Now that the terminal (as it was built for the Finland-bound vessel - ed.) is complete, the operator tells us that they have a stalled ship, and that it is our fault. Earlier they had said that there was no available ship and that bringing one would not be cost-effective, but now they insist that the inter-connection must be completed by tomorrow," the minister said.

"When I look at the timeline of events and our negotiations with Alexela and Infortar, I do not see the government making all of the wrong decisions and the private companies making all of the right ones. Yes, the government has not always done the right thing, but it is not as if one is an angel and the rest are screw-ups. I strongly advise you to look at the timeline of events starting from the beginning," she said.

Kallas was unsure if the state should ask Elering to acquire the inter-connector, which costs a few million euros. She said Ministry of Economic Affairs and Communications experts would would pursue the matter. Gas shortages do not t scare the PM either.

"What is the function of the ministry? Guarantee supply security. The ministry has assured us that there would be gas this winter. This FSRU, which connects to the Finnish quay, and the Balticconnector pipeline will meet our needs. Whether there is a necessity for a new FSRU, I cannot tell," she added.

On Monday, the ERR portal reported that Alexela and Infortar plan to bring a regasification unit (FSRU) to Paldiski for the winter, but Elering cannot install LNG receiving capacity by 30 November without an inter-connector. Elering claims the missing inter-connector is either part of the floating terminal, or the responsibility of private operators.


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Editor: Kristina Kersa

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