Joint Baltic LNG terminal should be located at Paldiski or Muuga - Estonian minister

Photo: SCANPIX

The joint liquefied natural gas (LNG) terminal of the Baltic countries and Finland should be independent of the monopoly supplier and located either at Muuga or Paldiski in Estonia, Minister of Economy and Communications Juhan Parts told BNS on Thursday.

Eesti Gaas, the company selling gas in Estonia, and the Finnish Gasum announced earlier this week that the best location for a regional LNG terminal is Inkoo on the northern shore of the Gulf of Finland. Both gas companies have the Russian energy giant Gazprom as a major shareholder.

The managers of Eesti Gaas subsidiary EG Võrguteenus and Gasum signed a respective agreement in Tallinn and informed the governments of both countries about it a short while ago. The companies' view is that since Finland has the biggest gas consumption levels of the four countries on the eastern rim of the Baltic Sea the new terminal ought to be located there.

The Balticconnector undersea gas pipeline to be built together with the LNG terminal should run from Inkoo to Paldiski, according to the two companies.

"Being independent of the present monopoly gas supplier is an unavoidable prerequisite for Estonia's support for the regional LNG terminal," Parts said. He said the importance of the project's not being dependent on any other party had been stressed on repeated occasions by EU member states as well as the EU Energy Commissioner Gunther Oettinger.

"The part of the agreement between the partially Gazprom-owned companies Gasum and EG Vorguteenus concerning Balticconnector is null and void because the government's approval is necessary for the establishment of cross-border connections," Parts said. He added that as far as the terminal project goes, Gasum and EG Võrguteenus have completely ignored the choice of location agreed between the countries that is based on objective criteria.

Parts said the terminal should be built either at Paldiski or Muuga, as is suggested by the comparative analysis of the EU sponsored terminal project commissioned from the company Booz&Co.

"The Gasum project at Inkoo has been described as equally good, because Finland is the biggest consumer of gas of the region's countries," Parts said. "However, according to the report, Finland's need for gas has been covered until 2025 by the agreement with Gazprom, therefore Gasum has no reason to hurry with the Inkoo project. Support from EG Võrguteenus to the preservation of monopoly for at least a dozen more years is ill-intended toward the consumer."

Talks between the terminal's potential hosts Finland and Estonia are to resume in the coming few weeks and in making the final choice also the other EU member states situated on the Baltic Sea will have a say. Together with the decision about the location of the terminal the decision will be made about the route for Balticconnector, the permission for the building of which must be issued by the government on behalf of the state of Estonia. The next formal meeting of member states on the subject will take place in Brussels on March 7 .

Talks over the location of the regional LNG terminal for Finland and the Baltic states have reached the decisive phase. After the rejection of a Latvian project, three projects remain under consideration in the final round of negotiation: Inkoo developed by Gasum in Finland and the Paldiski terminal of Alexela Energia and the Muuga terminal planned by transmission system operator Elering and Port of Tallinn in Estonia.