Page 11 - GLNG Week 20 2022

GLNG EUROPE GLNG

Estonian firms move forward

with LNG facility project

without state support

PROJECTS ESTONIA’S Infortar, an Estonian-based major expert Marko Allikson has said.
investment holding company, and the Estonian The price of European natural gas for the win-
energy company Alexela are moving forward ter or by the time it can be bought through Pald-
with constructing liquefied natural gas (LNG) iski depends primarily on whether Russian flows
facilities at the Port of Paldiski without state continue, especially to Germany and the rest of
support. When built, the Paldiski terminal is Europe. If they do not continue, prices will rise
expected to receive LNG – natural gas cooled to significantly from today’s levels, he says.
liquid form for ease of transport – from a floating Infortar says, however, that the supply is likely
terminal, a vessel fitted out for the purpose. to be enough to make up the shortfall once Rus-
Estonia consumes around 5 TWh of natu- sian natural gas is out of the equation, but this
ral gas per annum, with gas of Russian origin will be possible with up to three tanker vessels
currently accounting for 80% of this. The gov- operating.
ernment is now keen to end this dependence Estonia and Finland are linked by the Baltic-
following Russia’s invasion of Ukraine. connector pipeline, and, via Latvia and Lithua-
The Estonian Minister of Economic Affairs nia, to Poland too, while Lithuania already has an
and Infrastructure Taavi Aas said on May 13 that operational LNG terminal at Klaipeda.
the two companies would be “going it alone”, i.e. Meanwhile, Estonia’s natural gas seller Eesti
would not receive state support, ERR.ee, an Esto- Gaas announced on May 13 it has stopped offer-
nian news website, reported on May 13. ing private customers fixed-price packages as a
“They are doing it under market conditions, result of what it called “a fickle” market situation.
without any additional state contribution, and Estonia’s national energy company Eesti Ener-
not even state guarantees. The only task of the gia has stopped offering natural gas contracts
state is to ensure the connection of the quay to altogether. Alexela continues to offer fixed-price
the mainland and to ensure that the gas reaches contracts at a high price.
the Estonian gas network,” the minister is quoted Eesti Gaas gave instability following Russia’s
as saying by Estonian media. war in Ukraine as the reason it’s dropping fixed
Earlier in the week, controversy arose over packages.
claims that Alexela had requested a €40mn state “A changeable market situation would make
subsidy, which the company denies now. fixed-price agreements insensibly expensive,
As reported, talks involving the economic which is why we recommend our customers get
affairs ministry and state-owned grid distrib- flexible packages where the price changes with
utor Elering ground to a halt last week, but, a the market. The price of gas would need to sta-
week later, “good will can now be found”, Martti bilise before we could return to offering fixed
Talgre, CEO of Infortar said. Since the deadline prices, while no such development can be seen
for the construction of a proposed LNG terminal today,” Kersti Tumm, press representative for
in Estonia is just six months away, this requires Eesti Gaas, said.
strong cooperation on the part of all parties, Estonia has passed last week several impor-
including the state, he emphasised, however. tant decisions aiming to boost security of gas
One aspect which still needs resolving relates supply in the country.
to a join agreement for leasing the LNG floating On May 10, Estonia and Finland signed an
terminal which Estonia signed at the beginning agreement on the security of natural gas supply,
of this month; whether this procurement goes according to which the two neighbouring states
ahead depends on whether any viable alternative are to assist each other in case of disruptions in
arises, Taavi Aas said. supply.
The minister also noted that if through-flow Meanwhile, the country’s parliament,
of LNG is at around the 30 TW mark, then ter- RiIgikogu, has concluded the first reading of a
minal fees, another sticking point in the discus- bill that aims to ensure readiness for long-term
sions, will be relatively small, while the Etonian disruptions in the supply of gas. The draft legisla-
Competition Authority (Konkurentsiamet) will tion was prompted by Russia’s attack on Ukraine.
monitor this process. Estonia is set to keep around a fifth of Esto-
The price of natural gas is expected to rise nia’s annual natural gas needs in the form of
amid both the ongoing energy crisis and the a reserve, as part of efforts to decouple from
need to decouple from dependence on Russian dependency on Russian supply in the wake of
gas, but the use of LNG via the terminal will the Ukraine war. ™
not lead to an additional rise in gas bills, energy

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