TALLINN - Finland's Gasum said last week that it was still planning to build a gas pipeline connecting Tallinn and Helsinki to create a second path for the transportation of Russian gas to the Finnish market.
Tuomo Saarni, a spokesman for Gasum, told the Finnish daily Turun Sanomat that the pipeline would connect Finland with the Baltic network, including the Incukalns gas reservoir in Latvia. There are also plans to link the Baltic pipeline with the Polish network to establish a system of gas pipes covering nearly the entire Baltic Sea region.
Einari Kisel, head of the power-engineering department of the Ministry of Economic Affairs and Communications, said, "The realization of such a project is most welcome from the state's point of view. This project will definitely increase Estonia's supply stability. However, given that Finland is buying all of its natural gas from Russia, just like Estonia does, the pipeline will unfortunately not facilitate competition in the Estonian market."
Kisel also ruled out state support for the underwater pipeline.
"Such a project must be economically balanced and self-sustainable, that is why the state does not plan to support it financially. The state will create the legislative framework for using the link, which is already heavily regulated by EU legislation," he said.
An Eesti Gaas spokesperson said that the Tallinn-Helsinki pipeline project had regularly come up on the agenda since the idea was first floated in 2002, but there have been no clear developments as of May 7. According to Eesti Gaas, the pipeline is mostly necessary for the Finnish side, and any decisions as to the capacity of the pipeline, its route and other issues depend on talks between the main shareholders of both companies.
Currently, Finland's Fortum and Russia's Gazprom control one-fourth of the shares in Gasum. The state owns a stake of similar size, and Germany's Ruhrgas holds one-fifth of the company's stock. The large paper manufacturers - Metsa-Serla, Stora Enso and UPMKymmene - also own stakes.
Natural-gas sales in Finland totaled 4.77 billion cubic meters in 2003, an 11 percent increase year-on-year and a record for Gasum. Sales growth was mainly due to higher utilization rates at power plants as there aren't enough low-cost hydropower plants. The exceptionally cold winter of 2002-2003 also contributed to the rise of natural-gas sales, according to Gasum.
In 2002 about 11 percent of the country's total energy needs were covered by natural gas. About 2 million Finns live in homes heated by natural gas.
Gasum's Saarni confirmed that plans for the pipeline had not advanced beyond the initial stage and that necessary sea studies have not even been carried out. Nevertheless, the spokesman predicted that the pipeline would become operational in a decade.
Finland has been importing Russian gas since 1974 and has a long-term agreement with Gazprom, one of the major shareholders of Eesti Gaas.
The reservoir at Incukalns, not far from Riga, is Europe's third-largest gas reservoir and has the ability to increase capacity even further. During the Soviet period Incukalns served as a reservoir for both the Baltic states and northwestern Russia.