Estonia, Latvia, Lithuania and Finland need to agree soon where to put a regional liquefied natural gas terminal to avoid delaying European Union aid for the project, Estonian Economy Minister Juhan Parts said.
Consensus is needed on the $1.7 billion terminal’s site before an accord is reached on energy infrastructure financing in the EU’s Connecting Europe Facility for 2014-2020, which may happen as soon as next month, Parts said in an interview in Tallinn yesterday.
The three Baltic countries and Finland plan to build a regional LNG terminal with EU funding as part of a strategy to reduce dependence on Russia’s OAO Gazprom, their only natural gas supplier. Estonia and Finland are best placed for a regional terminal, the European Commission said in a study published last November, after three post-communist countries failed to agree on a location and asked for the EU’s ruling.
“We’re still a bit short of regional consensus and we need to achieve it in a month or two,” Parts said. “It would be very regrettable if we missed this window for making an investment decision. We need a consensus on the location by the time EU’s new financial perspective is adopted.”
Potential annual demand for the terminal is for about 11 billion cubic meters of natural gas, according to the study by consultants Booz & Co.
EU funding is “vital” for a regional terminal, Antero Jaennes, the chief executive officer of Gasum Oy, the Finnish grid operator, said in November. Finland’s government said in June the Nordic country should strive to connect its natural gas network to central Europe’s via Estonia to create competition in the industry.
Lithuania’s Klaipedos Nafta is building a floating LNG terminal, due to be completed by the third quarter of 2014. Norway’s Hoegh LNG last November signed a $250 million loan with four banks for that project.