Finland and Estonia bunk on floating LNG terminal to secure gas supply

The project announced on 7 April is apparently underway, though few details or specifics have been made public at this stage.

Finland and Estonia have made a joint decision to lease a large LNG terminal ship in their pursuit of ending the use of Russian gas.

The project announced on 7 April is apparently underway, though few details or specifics have been made public at this stage.

The roughly 200 metre-long LNG terminal ship, a floating storage and regasification unit (FSRU), will be located on the coast of Finland in the vicinity of the natural gas transmission network. The exact location has not yet been disclosed.

When asked by EURACTIV on Wednesday (20 April), Arto Rajala, a senior adviser at the trade and industry ministry, said he was not ready to give out any names, but “a few options will be available”.

Such options could be Inkoo or the city of Hamina, where an LNG terminal is scheduled to be completed by the beginning of October. However, the aim is to make the ship available for next winter, and if construction works have not been completed, it will be placed in Paldiski, Estonia. Paldiski should be ready to receive LNG by 1 November.

Estonia has said it will end Russian gas imports by the end of the year.

The share of gas in Finland’s energy mix is only 6%, but it is important for industry. Most natural gas comes from Russia, but also through the Balticconnector gas pipeline reaching out to the Klaipėda LNG terminal in Lithuania.

If and when imports from Russia end, gas has to be replaced with other energy sources – or increase the use of liquid gas. In the process, natural gas is liquefied by cooling to the point of -162 degrees. That reduces its volume 600 times and facilitates easier transport.

“The Balticconnector cannot cover all Finland’s demand in case there is no gas coming from Russia. LNG terminal ship is our only means to prepare,” said Rajala. The search for a ship is underway, but the global demand is high.

The cost of the LNG ship project has not been announced either. In the ERR News interview on 11 April, Eesti Gaas board member Margus Kaasik said a floating LNG terminal is more expensive than a stationary one because of operating costs.

Taavi Veskimägi, CEO of the electricity and gas system operator Elering said in the ERR interview on Tuesday (19 April) that system operators must also participate in acquiring a ship.

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