Stockpiling Agency: No Sense in Renting LNG Terminal Just in Case
10.12.2023 By Tank Terminals - NEWS

October 12, 2023 [ERR]- If things go to plan, Estonia will be able to receive floating storage regasification units (FSRU) in Paldiski this winter, but because renting them is hugely expensive, the government is not planning to bring one to Estonia for as long as there is enough natural gas available.


Ando Leppiman, head of the Estonian Stockpiling Agency, told ERR that the agency has been in touch with owners of FSRUs to gauge whether and how quickly Estonia could source one should its mainland gas link to Latvia also go offline, in addition to the Finnish connection. Leppiman added that he would not wish to speculate as to the answer.

“Let’s say that considering there is a very finite number of FSRUs out there, it makes no sense for Estonia to book one. I can tell you that the Stockpiling Agency has participated in these discussions, and the Ministry of Climate has given thought to potential emergencies,” he said.

“We have been in contact with owners [of FSRUs] and we have avenues we can take in an emergency,” Leppiman added.

He said that Estonian gas sellers have enough stock today, and there is nothing to suggest Estonia might have to tap into its 1 terawatt-hour reserve, not to mention renting an FSRU.

“Estonia still has access to the gas pipeline between Poland and Lithuania, as well as the FSRU in Klaipeda. Furthermore, the Incukalns storage site in Latvia is currently at 95 percent capacity, holding 21.5 TWh of gas. The combination of these sources is enough to ensure the necessary gas supply for the Baltic countries,” said Eesti Energia portfolio manager Silver Kera.

He added that news of potential sabotage caused a roughly 7-percent price hike on the Dutch TTF gas index, while this has more to do with wider panic as to the possibility of sabotage in Europe.

“In the European context, demand in Finland and the Baltics is so modest that this link [the Balticconnector pipeline between Estonia and Finland] being out of commission will not have a fundamental effect on prices.”


Paldiski still lacks port operator

However, Estonia should be ready to host an FSRU. The LNG mooring quay and port area in Paldiski is owned by the Estonian Stockpiling Agency, and Leppiman has previously suggested that Estonia should have the capacity to receive floating LNG terminals this winter. This requires finding a port operator, while a recent tender to find one fell through. Next, the agency launched talks directly.

“We promised that it will be possible to receive vessels based on commercial grounds this winter, and we are on schedule. /…/ Should a vessel wish to moor there, we can make it possible for them to disembark, ensure pollution control capacity and all other necessary activities. We are in the final stages of negotiations with a port operator,” Leppiman said.

The FSRU mooring quay secured its final technical permit from the Consumer Protection and Technical Regulatory Authority (TTJA) in September.


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