Management of Skulte LNG Terminal urges government not to abandon LNG terminal project

RIGA - The developers of Skulte LNG Terminal are calling on the government not to abandon the plan to build a liquefied natural gas (LNG) terminal in Latvia, LETA was told at the company. 

Managers at Skulte LNG Terminal warn that if Latvia loses control over its energy policy and continues to rely on gas supplies from neighbor countries, the national economy will fall behind Lithuania and Estonia even more. 

"Such decisions are not in the interests of Latvia's society, as they can result in harsh heating and electricity bills for all residents and business of Latvia. It is unwise to rely on a favorable price offered by the neighbors while remaining without own LNG supply ecosystem," the company's representatives warn. 

According to Skulte LNG Terminal's representatives, the controversial announcement made by the Climate and Energy Ministry on Tuesday was an attempt to hide the government's incapacity and avoid possible complaints in the future when the Climate and Energy Ministry and the government can face criticism for not promoting Latvia's energy independence and  for increasing the underdevelopment of the economy in comparison with the Baltic neighbors. Both Estonia and Lithuania will have their own LNG terminals, while Latvia, as usual, will have failed to complete its LNG terminal project, managers of the Skulte LNG Terminal warned. 

The Climate and Energy Ministry has clearly admitted that the Latvian government will not seek ways to support the development of a national LNG ecosystem, but will seek to increase Latvia's energy dependency on the neighbor countries, Skulte LNG Terminal's representatives said. State-owned energy group Latvenergo has already provided guarantees to the Klaipeda LNG terminal in Lithuania about its use for the next 10 years, and now the government has tasked the Climate and Energy Ministry with promoting the development of the Paldiski terminal in Estonia. 

It is not clear to Skulte LNG Terminal why the Latvian government and the Climate and Energy Ministry are so unwilling to use Latvia's natural competitive edge and support the development of a producing and exporting industry, giving up the chance to become the natural gas supply center for the whole Baltic region. 

According to Skulte LNG Terminal, the underground gas storage facility in Incukalns together with LNG infrastructure in Skulte would be a solution ensuring energy independence and enabling Latvia to participate in the market as an independent player, which would facilitate the economic transformation urged by Prime Minister Krisjanis Karins (New Unity). The LNG terminal and the Incukalns storage facility would allow Latvia to purchase gas for a lower price in summer and store it for the heating season, as well as to develop Latvia as a gas trade center. 

As reported, the government has refused to provide any financial guarantees to the developers of a liquefied natural gas (LNG) terminal in Skulte, Climate and Energy Minister Raimonds Cudars (New Unity) said at a news conference following the government meeting on Tuesday.

The minister indicated that the LNG terminal might be built if a developer completed an environmental impact assessment and built the terminal as a commercial project.

Cudars noted that the Climate and Energy Ministry has received the government's mandate to continue talks with Estonia on a shared use of the Paldiski LNG terminal. Also, work must continue to prepare for dealing with situations where LNG supply is impeded by some technical issues.

The minister said that since the beginning of last year, when the "government took a number of decisions under stress", the region's LNG supply infrastructure has significantly increased. Furthermore, gas consumption in the region is 30 percent lower than the capacity of the already existing LNG terminals.

As reported, at the end of September 2022, the Saeima passed in the final reading a bill proposed by the government and the Economics Ministry that granted the status of national interest to an LNG terminal Latvia is planning to building in Skulte, its pipelines with the natural gas system and related buildings.

Earlier, Prime Minister Krisjanis Karins (New Unity) said on Latvian Television that the government sticks to the position that Latvia needs its own LNG terminal for security considerations.