Baltic neighbours Estonia and Finland have applied jointly for up to 75% of the cost of a submarine natural gas carrying pipeline linking the two.
This evens out spikes in supply and demand during peak periods such as winter – mainly for Finland.
The Balticconnector, as the project has been named, is estimated to cost about EUR500 million and will span approximately 90 km between its putative landfalls at Viimsi, near Estonia’s capital, Tallinn, and Inkoo, 60 km south of Helsinki. The terminals and pipeline should be ready as soon as possible, with 2019 the current target. A decision is expected by early 2016.
Both countries have established state-owned companies for their sections of the project: Baltic Connector for Finland and Elering Gaas in Estonia. “Without significant investment support from Brussels”, the press release from Finland’s Ministry of Employment and the Economy stated, “the project cannot be realised”. This is why the two countries, with a combined population of 6.5 million, are aiming for the maximum 75%.
The ministry also said that the pipeline would make it possible to integrate Finland into the EU energy markets. Currently, most energy imports are from Russia in the form of electricity, natural gas, coal and crude oil.
Furthermore the construction of two-way gas infrastructure in the Baltics between Estonia and Latvia would mean that Finland could rely on the huge 4 million m³ underground gas storage facility at Incukalns in Latvia as a secure back-up for its own market needs.
Along with the pipeline application, Finland agreed to give up its plans to have the east Baltic regional LNG terminal located in the country. Now it is up to Estonia to decide if it wants it there or, like Finland, to have a small 30,000 m³ one for its own needs and rely on Latvia’s facility and Lithuania’s FRSU Independence, which started operations earlier this year and has capacity to spare.
This post was sourced from IHS Maritime 360: View the original article here.