Parts favors a 2-terminal solution

  • 2014-02-05
  • From wire report

TALLINN - Estonia, Finland and representatives of the European Commission agreed two weeks ago in Brussels that they will have to reach an agreement on the location of the liquefied gas terminal and building the Balticconnector gas pipeline by the end of February, reports ERR. Both Estonians and Finns have said earlier that the decision about the terminal’s location should be made by the European Commission, but the Commission would like the states to reach a compromise themselves.

“Finland, Estonia and the European Commission reached an understanding that a compromise proposal about the LNG terminal and ‘Balticconnector’ will be made by the end of February at the latest,” Finnish Economy Ministry Energy Department Deputy Director Herkko Plit told Public Broadcasting.

Recently Estonian Economy and Communications Minister Juhan Parts gave an interview to Finnish Kauppalehti, in which he said the regional LNG terminal, the location of which is still undecided, could be built in both Estonia and Finland and the ‘Balticconnector’ gas pipeline could be postponed for now. Estonian Prime Minister Andrus Ansip stressed that ‘Balticconnector’ is a priority, but any number of LNG terminals could be built by the Baltic Sea.
Booz&Company, a consulting firm hired by the European Commission for the assessment of the best location for construction of the Baltic region’s liquefied natural gas terminal after the Baltics were unable to agree amongst themselves, says in its final report that building the terminal in Estonia would achieve a number of advantages, adding that building the terminal in Finland would have similar advantages.

The proposal from Parts to divide the regional LNG terminal into two procurements, which would help Estonia and Finland overcome stalemate on the issue, needs approval by the European Commission first, reports Aripaev Online.
“It has been agreed upon with Parts that first we will ask from the European Commission about financing,” Finnish Economy Minister Jan Vapavuori, who discussed the proposal with Parts in January in Helsinki, told Kauppalehti.
Parts proposed that instead of one big terminal, the location of which hasn’t been agreed upon, smaller LNG terminals would be built in Finland and Estonia that would be big enough to receive big LNG ships.

The Commission supports, as a rule, big regional projects that end a situation where there is dependence on just one supplier. Finland and Estonia are both in that situation. If the procurement is divided into two, though, the question arises if it is suitable for EU financing anymore, said Vapaavuori. The other big issue is how it would affect the profitability of the project.

The Finnish minister expressed approval that Estonia has indicated a readiness for compromise in this complicated issue. “Finland has made proposals for a compromise, too. It would be good to find a solution that both could live with,” said Vapaavuori.