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Finland, Estonia to Lease Floating LNG Terminal to Alleviate Lack of Russian Gas

Sputnik News

Igor Kuznetsov

Since the cutoff of Russian gas over refusal to pay in rubles, the liquefied natural gas project worth nearly half a billion dollars has been called "absolutely essential" for the security of supply of natural gas in the Baltic region and therefore "extremely urgent".

Finland and Estonia are planning to jointly lease a nearly 300-metre long liquid natural gas (LNG) terminal to secure the supply of gas imports, following the recent cutoff from Russia.

Russia stopped exporting LNG to Finland in May, following Helsinki's refusal to pay in roubles as requested by Moscow. Earlier, Estonia proclaimed that it would neither pay in rouble, nor buy Russian gas at all. The cutoff has jeopardised several sectors of industry, including the bakery, forestry and petroleum industries which rely on gas.

The Exemplar is a massive 291-metre-long and 43-metre-wide vessel, with a gas storage capacity of 151,000 cubic metres. It was built in 2010 and sails under the Belgian flag. It will be leased from US-based Excelerate Energy for a period of 10 years, and the terminal will be available by the winter, docking in southern port of Inkoo, according to energy firms Gasgrid Finland and Fortum. The companies estimated the total costs of the LNG terminal ship project to be approximately EUR 460 million (nearly 490 million) under the ten-year lease agreement. There will also be costs related to the volume of use.

"The vessel project is absolutely essential for the security of supply of natural gas in the Baltic region - and therefore extremely urgent. I'm pleased that the decision on the location of the terminal was made on such a fast schedule. As the need for the terminal covers the entire Baltic Sea region, Inkoo provides an excellent location for the vessel", Gasgrid's CEO Olli Sipilä said in a statement.

Finnish Minister for Economic Affairs Mika Lintilä backed the new arrangement, thanking the two companies for "taking swift action".

"It is important for our economy that the floating LNG terminal ensures the gas supply of our industry. The next step is to stay on schedule and get the port ready", Lintilä said in the statement.

With a maximum capacity of around 68,00 tonnes of LNG - or more than 40TWh annually, the vessel is expected to be able to meet Finland's annual demand for LNG on its own.

Historically, Finland's annual natural gas demand has stood at around 25 TWh per year.

In March, Russian President Vladimir Putin instructed the government and national energy giant Gazprom to switch to ruble payments for gas deliveries to the countries that imposed sanctions on Russia over its special military operation in Ukraine. Gazprom has already suspended gas deliveries to several countries, including Bulgaria, Poland and Finland after they rejected the new payment scheme.

Until recently, gas accounted for around 8 percent of Finland's energy.

© Sputnik

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