Estonian government press release - April 7 2022
The Estonian government has decided, in principle, to cease all imports of Russian gas before the end of the year. In order to achieve this, a storage facility for liquid natural gas (LNG) is to be constructed in Paldiski and 1 TWh of gas acquired for the national supply by autumn.
“We must stop buying gas from Putin’s regime as soon as we can, since they are using the revenue from sales of it to fund their war against Ukraine,” said Prime Minister Kaja Kallas. “We have decided to increase our national gas supply and to establish a facility in Paldiski for the storage of LNG so that a floating terminal can be taken into use there from autumn. This represents an opportunity not only for Estonia, but for our region more widely, to head into winter without any dependence on Russian gas.”
Prime Minister Kallas says the government’s aim is to favour gas produced from LNG in bolstering its supplies. “What we are very much hoping to see from gas sellers is that their moral compass is pointing in the right direction in this regard,” she remarked. “Moreover, our position in principle is that any LNG ship that reaches Paldiski should not be carrying Russian gas.”
Minister of Economic Affairs and Infrastructure Taavi Aas stressed the importance of today’s decisions for the entire region and outlined the details of the plan. “Working with Finland, we will be taking a floating terminal into use that will guarantee that both of our countries are supplied with the gas they need going into next winter,” he explained. “We are in a unique position in the region here in Estonia in that we have the ability to set up an LNG floating terminal by this coming autumn. The pipeline will be constructed by Elering and the hauling quay by Alexela, the project for which has been in development for quite some time.” Minister Aas says that locating the floating terminal in Paldiski is, in regional terms, a temporary solution so as to ensure the necessary supply of gas as quickly as possible. In future, until the end of the lease period, the terminal will mainly be located in Finland.
In order to implement the project, the government supported the proposal put forward by Minister Aas to acquire, via Elering AS, a state holding in the company that will organise the leasing of the floating terminal.
The Ministry of Economic Affairs and Communications must now submit to the government a draft amendment to the Natural Gas Act covering solutions to gas supply emergencies and approval of the tariffs for the use of the LNG terminal.
In order to further mitigate the risks associated with ceasing imports of Russian gas, a decision was also taken at the cabinet meeting to acquire up to 1 TWh of natural gas (approx. 20% of Estonia’s annual gas consumption) via AS Eesti Varude Keskus. This will be able to be sold to all market participants in the event of supply disruptions. The gas is planned to be stored in the Inčukalns reservoir in Latvia.