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State acquires Paldiski LNG jetty with port property from private companies

Submitted by ospa on Fri, 03/10/2023 - 15:33

AS Eesti Varude Keskus (EVK) and Pakrineeme Sadama OÜ today signed an agreement whereby the state acquired the liquefied natural gas (LNG) jetty in Paldiski, together with the associated infrastructure and port property. The total value of the transaction, excluding VAT, is 31.5 million euros, of which the value of the jetty is 30 million and the value of the property is 1.5 million euros.

With the transaction, the Estonian Stockpiling Agency fulfilled the promise made by the government to the companies to buy the LNG jetty if their business prospects for managing the LNG receiving infrastructure change significantly.

According to Ando Leppiman, Chairman of the Management Board of the Estonian Stockpiling Agency, the jetty will be acquired with the aim of creating together with Elering, the owner of the gas infrastructure, an independent solution that ensures the security of gas supply for Estonia.

‘The main objective of the Estonian Stockpiling Agency is to ensure the supply of vital goods to the Estonian population, and the main use of the acquired infrastructure is based on energy security considerations,’ said Leppiman. 

Prior to the acquisition of the jetty, the Estonian Stockpiling Agency commissioned a legal, financial, and technical audit to ensure that the jetty to be acquired would meet the requirements. According to the Estonian Stockpiling Agency, Pakrineeme Sadama OÜ has done a good job in constructing the jetty and the accompanying infrastructure at a remarkable speed, and according to expert analysis, the jetty built on the sea will be able to receive LNG for the floating terminal.

‘After today’s purchase, the next task of the Estonian Stockpiling Agency is to continue preparations for completing the development of the port by autumn this year at the latest, and it is up to Elering, the gas system operator, to provide gas infrastructure and network connections. The aim of the Estonian Stockpiling Agency is to create the capacity to provide port services to international standards for vessels moored in the Port of Pakrineem.

All in all, Estonia will have the independent capacity to receive LNG by sea, the energy security of both the country and the wider region will increase, and companies in the region will have a third alternative for importing natural gas besides the ports of Klaipeda and Inkoo, which also have LNG receiving capacity,’ explained Ando Leppiman.

Marti Hääl, Member of the Management Board of Pakrineeme Sadama OÜ, thanked the Estonian Stockpiling Agency for the professional negotiations. 

‘An entrepreneur always desires a sound investment. To work toward and for, not against something. The state acquired the port from us at a much lower price than the cost of building it, and hopefully this solution and our contribution will help speed up the achievement of full reception capacity. Now, the start-up of Paldiski LNG is 100% in the hands of state-owned companies. Life is full of lessons, and we have lessons to learn from here too. We are convinced that, in the interests of Estonia’s economy, energy security, and well-being, LNG reception capacity should be achieved by the next heating season,’ said Marti Hääl.