Elering relying on insurance to cover damaged infrastructure, not EU

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Damage to the Balticconnector pipeline.
Damage to the Balticconnector pipeline. Source: Finnish Border Guard

Estonia's transmission system operator Elering is relying on insurance to cover the cost of the damage to an undersea gaspipe and communications cable damaged earlier this month not the European Union.

The 77-km Balticconnector gas pipeline is insured for €50 million by the insurance company Lloyds, Elering said. Both countries share the contract.

However, under standard insurance conditions, damage will not be compensated if it is caused by force majeure, for example, in the event the state is attacked.

The success of the insurance claim will be known after the investigation is concluded.

Finland's Prime Minister Petteri Orpo said he would request assistance from the EU on Thursday.

"As the system operator, we have insured the subsea gas pipeline and as a first solution, we expect the cost of repairing the pipe to be covered by insurance. We will await the outcome of the investigation in Finland and then apply for insurance. There is no reason to speculate on other financing options at this stage," said Ain Köster, Elering's communications manager.

The main goal is that Estonian consumers do not have to cover all the costs, Chairman of Elering's board Kalle Kilk told Frida's "Aktuaalnesle kaamaera".

"Our understanding has been that the first funding option would be through the insurance, but of course, we understand that if, for example, the insurance is not sufficient, if the repair perhaps turns out to be more than the limit, or if the claim does not apply, then, of course, we don't want the Estonian consumer to have to pay for that," he said.

The Balticconnector gas pipeline has been out of commission since October 8 after it experienced a sudden drop in pressure.

This turned out to be a leak and an investigation by Finland concluded it was likely made by an anchor from the Hong Kong-flagged Newnew Polar Bear ship.

A communications cable owned by Finnish telecoms company Elisa also running between Finland and Estonia was also damaged, and a cable connecting Estonia and Sweden.

This article was updated to add comments from Kalle Kilk.


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Editor: Mari Peegel, Helen Wright

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