Thursday, May 23, 2024
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Elering and Gasgrid sign agreement for the joint lease of the LNG floating terminal

Estonian and Finnish gas Transmission System Operators (TSOs) Elering and Gasgrid Finland signed a cooperation agreement for the joint lease and management of the LNG floating terminal to ensure the security of gas supply in both countries and to end the need for Russian pipeline gas consumption.

According to Taavi Veskimägi, Chairman of the Management Board of Elering, this agreement clarifies the most important part of the LNG supply chain, the LNG floating terminal.

“Our joint process, including securing of the vessel to the region by the end of the year is progressing as planned,” he said. “Once the floating terminal has become the cornerstone of this complex and multi-stakeholder cooperation project, we will continue negotiations with Alexela and Infortar in Estonia to develop a haulage site in Paldiski. It will depend on these negotiations when gas traders can start using the LNG terminal to deliver gas to the region. To the market participants, we want to go public with the rules of using the terminal as soon  as possible.”

According to the cooperation agreement between Elering and Gasgrid, the parties will develop the necessary infrastructure for accommodating the LNG floating terminal and will bear the related costs in each country. However, the rental costs of the floating terminal are going to be covered jointly. The costs are divided between the parties in the same proportion as the Estonian and Finnish gas consumption: Elering’s share is 20 per cent and the Finnish partner’s 80 per cent.

lng floating terminal
Source: Gasgrid.

“The project is progressing as planned and in very good cooperation with Elering,” added Olli Sipilä, CEO of Gasgrid Finland. “This continues the good co-operation that was also done with Balticconnector. The rapid response of the Finnish and Estonian governments to the changed situation was crucial. It has been great to see the positive reception we have received as well as the support to promote the project among various stakeholders. We will proceed in stages and inform about the matter as soon as possible so that stakeholders can prepare for their own actions.” 

According to the current plan, the LNG floating terminal will arrive in Estonia by the end of the year and remain there until the hauling site for the terminal is also completed on the Finnish side. Standing in Finland, the floating terminal is able to serve both Finnish and Estonian customers in the best possible way and ensure the security of supply in both countries.

With the LNG floating terminal also in Finland, Estonia will have two potential gas supply directions, Balticconnector and the floating LNG terminal in the north and the Latvian underground gas storage facility, the Klaipeda terminal and the Polish-Lithuanian gas connection in the south.

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