Elering, the Estonian transmission system operator, and Gasgrid, its Finnish equivalent, are both preparing for the arrival of the offshore LNG terminal.
The two governments have agreed that the Exemplar, a floating storage and regasification vessel (FSRU) which is currently en route from Argentina, will dock in the port where reception capacity will be available sooner.
Martti Talgre, managing director of Infortar AS, which is building a terminal at Paldiski alongside Alexela, told ERR there was no longer any doubt that the ship would arrive at Paldiski.
“Looking at the current situation, it looks like a done deal – construction in Paldiski is moving faster,” he said.
Talgre explained that the terminal consists of three elements: the quay, the ship and the connection to the gas network.
The two companies Alexela and Infortar have made every effort to meet the deadline for delivery of the work.
There were 125 concrete trucks at the Paldiski wharf last week, and work is essentially going on around the clock on land and sea.
“This is an unprecedented pace for port construction,” Talgre said. “And since the agreement is in place and all parties are meeting their deadlines, there should be no doubt today that Estonia will have its reception capacity ready sooner and we will see a so-called white ship in Estonia .”
The Estonian and Finnish terminals are connected to the Balticconnector, a gas pipeline linking the two nations. In terms of capacity, it doesn’t matter which country Exemplar arrives in, as the pipe is the same size on both sides of the Baltic Sea.
“However, to our knowledge, the conditions at Inkoo Port are considerably more difficult, particularly during winter and in cold seas. Only a few vessels would have access to Inkoo and the availability of such ice-class tankers is extremely limited. Economic considerations favor Paldiski because, from the perspective of the gas user, Paldiski is a safer and less expensive route,” Talgre explained.
Talgre said the Latvians are also interested in the Paldiski terminal as they are eager to balance their gas flows between the Klaipeda and Paldiski terminals. The Latvians currently have the largest gas storage facility in the region, Talgre added.
The terminal guarantees security of supply, not low costs
The development of an LNG terminal does not necessarily mean a drop in gas prices, which are now on the rise.
The price of US LNG contracts for delivery in November, December and January hit a 14-year high last week.
Talgre said the price of natural gas is already determined by the price of LNG and the completion of the terminal will ensure security of supply. However, under certain conditions, a price reduction is also possible, he added.
Timo Tatar, deputy state secretary for energy at the Ministry of Economic Affairs, said late last week that when the Exemplar reached the Gulf of Finland at the end of October, its LNG tank might already be full.
At this point, it’s unclear if the shipment is there, but even if it was, Tatar explained, it wouldn’t be destined for Estonian consumers.
Talgre said it was up to Elering and Gasgrid to comment on any potential cargo.
“The truth is that a terminal is more than just hardware; it is also software, so to speak, i.e. people, contacts, contracts, promises, as well as a service in general. Terminal functionality, security of supply and safety all depend on this,” he said.
Ain Köster, Elering’s communications manager, said their responsibility was to build the pipeline to Paldiski, but they were unable to provide information regarding the loading of the vessel.
The Exemplar was leased for ten years to regasify liquefied natural gas (LNG) for Finland, Estonia and other Baltic countries. The FSRU can regasify more than five billion cubic meters per year.
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