Finnish-Estonian cooperation on LNG terminal ship lease advances with ministerial MOU and progress in transmission operator cooperation
On 29 April 2022, Finland and Estonia published a Memorandum of Understanding (MOU) regarding cooperation on leasing a LNG terminal ship. The MOU was signed by Minister of Economic Affairs Mika Lintilä and Estonia’s Minister of Economic Affairs and Infrastructure Taavi Aas.
Leasing a floating storage regasification unit for liquefied natural gas (LNG) is the fastest way to phase out dependency on Russian pipeline gas. The aim is to have the terminal ship available for use next winter. Leasing the ship enables Finland to reduce its dependency on Russian pipeline gas.
At the meeting on 7 April 2022, the Government’s Ministerial Committee on Economic Policy recommended that Finland lease a large LNG terminal ship in cooperation with Estonia.
The premise for leasing the ship and the practical implementation of cooperation are agreed on in the MOU.
The terminal ship would be located on Finland’s south coast in the immediate vicinity of the natural gas network. The necessary port structures and connection to the gas network would be built in Finland and Estonia. It is important that the terminal could be in use already next winter. For this reason, the terminal ship would be located in an Estonian port next winter if the port construction is completed in Estonia before Finland.
Transmission network companies assess leasing of LNG terminal ship together
Gas transmission operator Gasgrid Finland Oy was given the task to assess and negotiate, in cooperation with the Estonian transmission network company Elering AS, the terms for leasing an LNG terminal ship and with implementing the project as fast as possible to guarantee security of supply, in particular.
“The project is progressing as planned and in very good cooperation with Elering AS. It has been of paramount importance that the Finnish and Estonian governments have responded swiftly to the changed situation. I am pleased that different stakeholders have welcomed the project and extended their support for it. We are progressing in stages and we will provide information on the matter as soon as possible so that the stakeholders can prepare for their own measures,” says Olli Sipilä, CEO of Gasgrid Finland Oy.
Treaty on solidarity measures regarding gas supply
Finland and Estonia also signed a treaty under the EU Security of Gas Supply Regulation on solidarity measures to ensure the security of gas supply. It lays down a framework for applying the solidarity mechanism as a last resort in serious disruptions in gas supply.
The parties commit themselves to take action in situations where the supply of gas to customers covered by the solidarity mechanism within the territory of the other contracting party cannot be ensured. The treaty contains provisions of a legislative nature. Therefore, the adoption of the treaty requires the approval of Parliament, and its provisions must be brought into force by an act.
Arto Rajala, Ministerial Counsellor, Ministry of Economic Affairs and Employment, tel. 029 506 4828 (MOU on LNG)
Olli Sipilä, Chief Executive Officer, Gasgrid Finland Oy, tel. +358 40 589 4686 (Cooperation of transmission network companies)
Mirjami Tanner, Senior Specialist, Ministry of Economic Affairs and Employment, tel. +358 29 504 7167 (Treaty on solidarity measures)