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State endorses superficies license for undersea part of Balticconnector

A gas pipeline in Estonia. Photo is illustrative.
A gas pipeline in Estonia. Photo is illustrative. Source: (Urmas Luik/Pärnu Postimees)

The Estonian government on Thursday endorsed a regulation to grant a superficies license for the Balticconnector undersea gas pipeline between Estonia and Finland as well as increase the share capital of the state-owned transmission system operator Elering by €40 million in order to make the investment possible.

"Estonia already is interconnected with Finland by two electricity cables; now we can take a step forward and connect the gas markets of Lithuania, Latvia and Estonia with Finland as well," Minister of Economic Affairs and Infrastructure Kadri Simson (Center) said in a press release.

"In addition to interconnecting the markets and making the market bigger, Balticconnector is also important from the viewpoint of energy security. The more energy interconnections there are, the greater is the security of supply of gas," the minister said.

The right of superficies is granted to Elering for 50 years. The underwater portion of the gas pipeline will run from Pakri Peninsula in Northwestern Estonia to Inkoo, Finland. The length of the pipeline in the economic zone of Estonia will be approximately 33 kilometers, and in total 77 kilometers of pipe will be laid on the sea bottom. The total length of the planned interconnection is 153 kilometers and the estimated cost €250 million, of which the EU will provide €187.5 million. The issuance of the superficies license was preceded by an environmental impact study.

The gas pipeline will be a part of the all-European energy network TEN-E , whose goals include building gas infrastructure to end the isolation of the three Baltic states and Finland and their dependency on a single supplier, to reinforce internal grid infrastructures, and to increase diversification and security of supplies in the Baltic Sea region. Balticconnector is due to be completed at the end 2019.

The increase in the share capital of Elering by 40 million euros is aimed at enabling large-scale investments such as the construction of Balticconnector and increasing the throughput capability of the gas interconnection between Estonia and Latvia.

The total cost of the cross-border gas projects in the investments budget of Estonia for 2018-2020 is €165 million, and agreements on EU aid in the amount of €114 million to ensure their financing have been concluded.

Editor: Aili Vahtla

Source: BNS

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