The need for a terminal located in Estonia became acute again when Russia threatened last week for the first time to turn off gas valves for political reasons. Since it has not yet been possible to physically transport gas to Estonia from the terminal located in Lithuania, Estonia’s only way to secure the supply of gas is to quickly build its own terminal.

“By August, it will become clear whether the European Commission supports building a regional LNG terminal by the Gulf of Finland, on the basis of which we will make a final investment decision in September and declare an international construction tender,” said Alexela Group board member Marti Hääl. “If the European Union does not support the construction of the terminal, we will build it ourselves.”

The European Union’s support can in case of a positive decision cover 5-15 percent of the nearly 300 million euro costing, 160,000 cubic meters capacity terminal value.

The main clients of the regional LNG terminal in Paldiski would be companies with high power consumption. The first Estonian companies that would use LNG produced in Russia’s Kingissepp district would be the Saaremaa Dairy Company. The second important group of customers would be small LNG terminals set up by the Baltic coast which supply with gas local industries and start bunkering ships that give up the use of black oil due to harsh environmental conditions.

Estonian Prime Minister Taavi Rõivas and Prime Minister of Finland Alexander Stubb reached an agreement in November last year after years of the two states public and private entities battling on the issue that the regional LNG terminal will be built in Finland, the gas markets will be linked and the infrastructure will be built by 2019 at the latest. For quite some time, the favoured location for the regional LNG terminal in Estonia was Paldiski, where Alexela Grupp would have developed it.