Photo: Ministry of Economic Affairs and Communications (Republic of Estonia).

By Kadri Laube, PR Advisor in Ministry of Economic Affairs and Communications (Republic of Estonia)

Estonian Minister of Economic Affairs and Infrastructure Taavi Aas and Finnish Minister of Economic Affairs Mika Lintilä have agreed to the joint leasing of a floating terminal for liquid natural gas (LNG) that will guarantee the supply of gas to both countries.

“The supply of natural gas to both Estonia and Finland is highly reliant on Russia, and given the uncertain times we are facing, that means we have to cover our backs and make preparations to do without Russian gas altogether,” Minister Aas explained. “We and our neighbours across the gulf felt it made sense to join forces and shore up the supply of gas to both our countries by taking into use a shared LNG terminal, which we intend to do later this year.”

Minister Lintilä says we must be prepared for disruptions in gas imports as a result of the war in Ukraine. “A floating LNG terminal is an effective way of ensuring gas supplies, including for industry,” he remarked. “My thanks go out to the Estonian government for their smooth cooperation on this issue.”

The plan foresees Estonia and Finland establishing the hauling quays needed to service a floating LNG terminal before jointly leasing such a terminal, which can be used by both countries on the northern and southern shores of the Gulf of Finland. The quays will be established in Paldiski in Estonia and in Inkoo in Finland. The floating terminal is planned to be in place by autumn, at first alongside whichever hauling quay it can be installed soonest. The location of the terminal thereafter will depend on market need and size. The hauling quays on both sides of the Gulf of Finland will boost security of supply for consumers of gas in both countries and ensure the flexibility required for the use of the floating terminal.

Both countries will bear the expense of establishing the quays, while the cost of renting the floating terminal will be shared according to how much gas each country uses.  The Estonian and Finnish gas system administrators Elering and Gasgrid are working together to implement the plan.

The agreement entered into between the two countries will provide a rapid solution to the problem of ensuring the security of the supply of gas to the region, with the period of cooperation limited to the lease period of the floating terminal.

Since the Baltic States and Finland as a region are strongly tied to Russian gas supplies, almost half a year’s consumption would not be covered if the supply lines were cut. Finland consumes around 23 TWh and Estonia around 5 TWh of gas a year.

Due to Russia’s aggression in Ukraine, the European Union as a whole has set itself the goal of forgoing Russian gas as soon as possible, but by the end of the decade at the latest.