Finland prepares to secure its natural gas supply by leasing a massive LNG terminal vessel from Excelerate Energy in the United States.
On Saturday morning, Russian energy company Gazprom Export cut natural gas deliveries to Finland. The gas was delivered through the Finnish company Gasum Oy.
However, to quote the headline of the statement by the Ministry of Economic Affairs:
The situation is under control.
Like many other countries, the gas deliveries were cut because Finland refused to pay in rubles for pipeline gas supplies.
“Gasum doesn’t want to, and the Finnish government doesn’t give the permission,” said Jarmo Talasrinne, the director of the bakery at Linkosuo in Kangasala near Tampere, central Finland.
Linkosuo, known for its rye crips crumbled even in China, is one of the bakeries that has been dependable on Russian gas. Now, Talasrinne believes that the Balticconnector gas pipeline between Finland and Estonia may provide enough replacement gas from the Baltic states until Midsummer.
According to the Ministry of Economic Affairs, Finland has made preparations for the cutting of Russian gas imports, “but replacing them is not without problems.” “The precise impact on the availability and price of gas will depend on the import routes used and the development of demand. In summer, demand is clearly lower than in winter,” the ministry notes.
The ministry notes that the direct gas needs of household customers can be covered in all situations, as can the gas required by the essential services of society.
The statistics by the Finnish Gas Association reveal that in 2019 there were around 4,000 detached houses and around 1,100 terraced houses and apartment blocks heated with gas. In addition, around 1,200 service or retail premises and 21 greenhouses were heated with natural gas.
The National Emergency Supply Agency (NESA) has made preparations to meet the needs of protected customers, that is household customers connected to the gas network. NESA is also preparing to be able to meet the gas needs of healthcare and social welfare and of the energy-critical food industry.
Energy companies may switch, and some have already switched, from gas to other fuels on market terms. When Russian imports end, the situation of industrial plants that use gas will vary. Some of them have already changed fuel, some are shifting to source gas from the Baltic countries via the Balticconnector pipeline.
Some will be compelled to suspend operations when pipeline gas imports are cut. For this reason, local and regional effects, such as lay-offs, are possible.
In addition to the Balticconnector, gas will be also supplied to Finland in the form of liquefied natural gas (LNG) via terminals in the northern city of Tornio and southwestern city of Pori and through a terminal in the southeastern city of Hamina to be completed in the autumn.
To cover the industry’s delivery and security of supply needs, Finland has leased an LNG terminal vessel.
Last Friday, Gasgrid Finland Oy and the U.S. company Excelerate Energy, Inc. signed a 10-year lease agreement for an LNG terminal ship. The LNG terminal ship, 291 meters long and 43 meters wide, will play a significant role in securing gas supplies for Finland’s industry. It has a volume of about 151,000 cubic meters and corresponds to about 68,000 tonnes of LNG, or liquefied natural gas when fully loaded.
The capacity of the vessel, according to Steven Kobos, the president and chief executive officer of Excelerate Energy, who was speaking at the press conference on Friday, is enough to cover the total gas consumption of both Estonia and Finland, and there will still be gas left over to use.
The terminal ship is intended to be taken into use next winter and will be located in southern Finland. LNG is delivered to the terminal by tankers from the global market, and the tankers are estimated to visit the terminal 2–3 times a month.
New port structures will be built for the terminal vessel on the coasts of both Finland and Estonia. If the structures in Estonia are completed first, the vessel can be placed temporarily on the Estonian coast until the necessary infrastructure in Finland is ready for use.
The total cost of the LNG terminal vessel project with the 10-year lease is estimated to be €460 million, in addition to which there are separate costs associated with the volume of use.
Annika Saarikko (the Centre), the minister of finance, said at the press conference that terminal vessels are now in high demand around the world when many countries are looking to cut their dependence on Russian natural gas.
“The competition for these is now high. and that’s why to get an experienced and reliable supplier in this schedule is an excellent accomplishment,” Saarikko said.
