LNG terminal location still a tossup

RIGA - The choice of location for building a liquefied natural gas (LNG) terminal in Latvia will not be made just so someone could benefit from it, or to do an ill turn to anyone; the decision will be made based on considerations of cost and feasibility, said Economy Minister Artis Kampars (Unity) in an interview with Nozare.lv. Knowing “regional jealousy,” Kampars declined to name the place for construction of the LNG terminal until the electric utility Latvenergo presents its analyses and estimates. Kampars, nevertheless, wishes to refute any concerns there may be about the objectiveness of the choice.

Ventspils Mayor Aivars Lembergs said at a press conference last week that Ventspils had all the advantages for building an LNG terminal there. These include an ice-free port, the geographic position of the city and the Ventspils Port’s experience of handling and storing liquefied gas. Lembergs said he was surprised at the plans to build the LNG terminal at Riga Port. In his opinion, Ventspils and Klaipeda ports are superior to Riga Port in this respect.

Kampars said in the interview that the infrastructure, developed in Soviet times, was built with Riga in the center. This is the argument that Kampars mentioned when presenting Latvia as a potential country for construction of an LNG terminal in the Baltic countries. For Estonia or Lithuania to build it, their infrastructures need to be changed, said Kampars.
Latvia is also the only country in the region to have underground gas storage facilities. In the long term, the terminal will not be able to operate without such a facility, and no new ones will be built, said Kampars.
The third reason in Latvia’s favor is the possibility for gas transportation to a place that is comparatively close to the Incukalns underground gas storage facility.

Partners in other Baltic countries are worried that the project could be taken over by companies affiliated with Russia’s gas monopoly Gazprom, which already controls gas supply to the Baltics and is the main reason for the Baltics to be considering building their own LNG terminal – to gain energy independence from Russia.
Kampars added that Latvenergo is capable of consuming 40 percent of the total amount of gas consumed in Latvia. He hopes that Latvenergo’s evaluation will be prepared by May. When the European Commission meets in June or July to discuss allocation of funds for the next financial period, Latvia must be ready to present not just a vision, that the LNG terminal will ensure energy security for the Baltic countries and introduce alternative supply channels, but also costs, solutions and other details of the project.

“That is when we will have to present and tell how much it will cost, and how much money we want the European Commission to allot. Most probably, we will have to visit potential investors abroad who might want to finance the project. Then a detailed assessment of impact on the environment will be carried out, and so on. If the European Commission allots the money in the next financial period, in 2014, then construction of the terminal could start in 2014, and conclude in 2016-2017,” said Kampars.
As for gas, it could come from anywhere in the world. “It is important that if there are any problems in the relations with Russia, we can switch to gas from Norway or, for instance, Qatar or Oman. These countries are also interested in financing the project,” said the minister.

Polish President Bronislaw Komorowski, at a meeting with visiting Latvian President Valdis Zatlers on March 16, had words of praise for the course of the liquefied natural gas terminal project in Latvia. Komorowski expressed the view that construction of the terminal could facilitate energy independence and market diversification, reports AFP.
Zatlers, on a working visit in Poland, devoted talks to energy issues - solutions for the independent supply of power and natural gas. “We all need a long-term energy policy, both a national one and a regional one, and one for the entire European Union,” Zatlers said. “Security means a very simple thing: we should be sure that deliveries will always be available, and that no process will influence or stop them.”

Latvia, Lithuania and Estonia, with a combined population of 6.7 million, are trying to ease their energy reliance on Russia, dating back to the communist era. They are pushing to bolster their ties to the rest of the EU’s energy networks, a process which has proven sluggish since the bloc expanded beyond the former Iron Curtain in 2004.

The goal, Zatlers underlined, is to ensure multiple energy suppliers for the entire EU. “We have to think about the market, because the mechanism that brings the price down and creates security is a multiple-choice market economy. Unfortunately, we don’t have a clear model in Europe,” he said, noting that competing economic interests come into play.
“I never divide new members and old members, or big members and small members. If you want the European Union to function as an economic power, we should avoid these divisions into different groups,” he added.