2023-05-02 13:42:28
Latvia and Estonia are preparing an agreement that would allow joint purchase of liquefied natural gas (LNG) in the event of a shortage, Kristens Michals of Estonia’s climate announced.
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“We are preparing an agreement with Latvia in case the situation on the natural gas market changes to the point where supply difficulties arise,” he said, adding that the agreement provides for natural gas deliveries to the port of Paldiski using a storage and regasification vessel (FSRU) when the LNG terminal is completed in the port .
At the same time, Michals emphasized that the situation is currently stable and that kind of intervention is not necessary, but both countries could jointly lease FSRUs if a significant shortage of natural gas is predicted.
The Ministry of Climate and Energy of Latvia announced in April that it will start working on the development of conditions for the joint use of the Paldiski terminal with the aim of strengthening the security of natural gas supply. Michals has met with Latvian Climate and Energy Minister Raimonds Čudars (JV) and Prime Minister Krišjānis Kariņa (JV) to talk about this issue.
Estonia’s climate minister confirmed that the talks are at an early stage, which means that there are no concrete plans yet, but the initial memorandum of understanding could include conditions on how the two countries would share the costs.
A more distant goal is to agree on more precise plans, Michals added.
“That way, when the market situation changes and critical conditions arise, we can act immediately,” he said.
After that, a memorandum of joint intentions between the ministries of the two countries will be prepared.
Latvia initially considered building its own LNG terminal, following Estonia’s Paldisku and Finland’s Inko projects, which were completed after Russia re-invaded Ukraine on February 24 last year and changed the energy landscape in the region.
However, in February, the Latvian government rejected the opportunity to provide state guarantees to the developers of the Skulte terminal.
The Estonian terminal in Paldiski also caused disagreements between the state management system operator “Elering” and the private companies “Alexela” and “Infortar”.
However, the terminal infrastructure project was completed, and in mid-March the Estonian State Reserve Center bought the terminal and its adjacent infrastructure from the project developer Pakrineeme Sadam, whose owners are Alexela and Infortar, for 31.5 million euros.
There is no FSRU vessel in Paldisko, as it was originally planned to be leased with Finland, which developed its terminal Inko.
Estonia stores its natural gas reserves in the Inchukalnas underground gas storage.
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