Estonia to stop importing Russian gas in 2022
TALLINN. April 7 (Interfax) - Estonia's government decided on Thursday to stop importing gas from Russia this year.
An LNG terminal will be built in Paldiski instead, the government press office said.
"We have decided to increase our national gas reserves and build facilities to receive LNG in Paldiski, where a floating LNG terminal could be launched in autumn," Prime Minister Kaja Kallas said.
"We also have a main principle where LNG is concerned: the LNG vessel must not be filled with Russian gas," she said. "The government's goal is to prioritize gas derived from LNG when building gas reserves," Kallas said.
The government expects the floating terminal will be launched jointly with Finland and will be located in Paldiski on a temporary basis. It will be moved to Finland before the lease is up.
The government backed a proposal to acquire a stake in the company that organizes the terminal's lease.
The companies Elering and Alexela will build a gas pipeline to the terminal.
The government decided to purchase up to 1 TWh of natural gas through Eesti Varude Keskus, corresponds to about 20% of Estonia's annual gas consumption, to further mitigate the risks associated with phasing out Russian gas. This volume of gas will be available to all market participants in the event of supply disruptions. There are plans to store the gas in the Incukalns storage facility in Latvia.
The Estonian authorities had estimated it would cost 300 million euros to buy a floating LNG terminal and 50-70 million euros per year to lease one. A special berth will need to be built at the port of Paldiski.
The Paldiski LNG terminal project has been discussed for more than ten years, but local media report it has run into a dead end. The Estonian company Alexela offered to invest in the project, but the European Union in 2017 rejected the company's request for a grant to cover more than 40% of the estimated costs, estimated at 400 million euros. The EU decided that the Klaipeda LNG terminal in Lithuania, which was put into operation in 2014, had sufficient capacity to supply gas to neighboring Estonia and Latvia as well.
