Concerns Over Estonian LNG Possibility
- New Europe Investor
- November 03, 2015
With the European Union receiving a funding application for a liquid natural gas terminal at the port of Paldiski, Estonia, there are concerns as to the viability of such a project.
Lithuania introduced a liquid natural gas terminal at the port Klaipeda last year to much national fanfare. In the year since, it has become the source of great controversy in the country.
The uptake at the terminal has been lower than expected. In addition, the cost of maintaining the terminal has been realised to be extremely high and is now receiving government subsidies. Lithuania is also using a lot less gas than when the terminal was conceived, and with Gazprom now pricing gas to the Baltics more favourably, the need for expensive LNG is lower than before.
Concerns are now been raised in Estonia of the viability of competing terminals, in a region where only one terminal’s viability is being questioned after a year.
Lithuania’s terminal has a capacity of 4 billion cubic metres. The annual usage of gas by the entire Baltic region is only 5 billion cubic metres.
Estonia’s project is to be carried out in cooperation with Finland, with Latvia billed as a potential buyer also. This could put Lithuania’s Klaipeda terminal in huge difficulties.
Klaipeda was initially hailed as a means of freeing Lithuania’s gas supply from a Russia monopoly on the country, with the combined ability to supply the rest of the Baltics and Poland in the future, when the infrastructure allowed it.