Paldiski LNG Terminal

From Global Energy Monitor
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Paldiski LNG Terminal is a proposed LNG terminal in Estonia. (Some sources have the project misspelled as "Padalski".)

Location

The map below shows the location of the project, in Paldiski, Harju County.

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Project Details

  • Owner: Balti Gaas
  • Parent: Alexela
  • Location: Paldiski, Harju County, Estonia
  • Coordinates: 59.38445, 24.07494 (exact)
  • Capacity: 1.8 mtpa[1]
  • Status: Proposed
  • Type: Import
  • FID Status: Pre-FID[2]
  • Start Year: 2025[3]

Note: mtpa = million tonnes per year; bcfd = billion cubic feet per day

Background

Paldiski LNG Terminal is a proposed liquefied natural gas (LNG) regasification terminal in Estonia. The project would be built by Balti Gaas, a subsidiary of Estonian company Alexela Group. The project would cost about $1 billion in total.[4]

In February 2017, the EU denied Alexela's application for a grant of about $400 million for the project from the European Cohesion Fund. Alexela announced that it planned to continue pushing forward with the project anyway, using private capital.[5][6]

In October 2018 Alexela and Tallinna Sadam signed a memorandum of understanding (MOU) to jointly develop a proposal for an LNG terminal.[7]

There appears to be a certain amount of competition between this proposal, the Lithuania's Klaipeda LNG Terminal, and the Tallinn LNG Terminal for EU endorsement and funding. According to Food and Water Europe's profile on Estonian gas, "These two projects [the Tallinn Terminal and the Paldiski Terminal], have not been accepted in the third [Projects of Common Interest] list but both applied as candidates for the 4th list. The Commission seems to only support one project in the region leaving it up to the Baltic states to decide on which will be their priority project. It is clear that a new LNG terminal such as this would need financial support from the EU. This support would potentially have to be really significant, as conceived by the Paldiski LNG terminal project operator who warned that the infrastructure could only be built if the European Commission was covering 43% (around €150 million) of the €344 million needed. However, an application by the Paldiski LNG project promoter for EU funds under the [Connecting Europe Facility] was denied in 2017. Other developments make plans to add new LNG capacities seem even less reasonable: the Lithuanian LNG terminal which is already able to supply Estonia and Latvia with gas, was planned to be leased until 2024. The Lithuanian government approved the terminals acquisition after 2024 in 2018, which makes it clear that these import capacities would be available beyond 2024 if necessary."[8]

In May 2019, Estonian media reported a senior Alexela official commenting that the terminal could start operating in 2025, and that projected construction costs were estimated at €300 million.[3]

The project features as a 'Priority Project' on the website of the Three Seas Initiative, a forum of 12 EU member states which has an associated Investment Fund set up to catalyse investments in the energy, transport and digital sectors of the participating countries. The project entry for the Paldiski LNG Terminal states that construction is planned for the 2021-2024 period, with completion by 2025. The project budget is stated as €400 million, with financing sources "To be determined". As of May 2021, the project description states: "All requisite planning and FEED [front End Engineering Design] is completed, all building and environmental permits have been obtained. On-site preparatory works of infrastructure have started."[9]

Articles and resources

References

  1. Baltic bout: Klaipeda LNG terminal squares up to regional competitors, Gas Strategies, September 30, 2020
  2. TYNDP - Annex A - Projects Tables ENTSOG, accessed February 4, 2021
  3. 3.0 3.1 Alexela käivitab Paldiski LNG-terminali 6 aasta pärast, Aripaev, May 8, 2019
  4. Alexela to launch large LNG terminal in three years, Postimees, 20 Apr. 2015.
  5. Alexela's Paldiski LNG terminal not granted EU funding, ERR.ee, 21 Feb. 2017.
  6. Alexela Group to continue LNG import terminal in Paldiski, Central European Financial Observer, 3 June 2017.
  7. Tallinna Sadam, Alexela to work on Paldiski LNG terminal, LNG World News, Nov. 1, 2018
  8. Estonia, Food and Water Europe, accessed Dec. 4, 2019
  9. Commissioning of the regional LNG terminal in Paldiski, Estonia, Three Seas Initiative Priority Projects Database, accessed May 10, 2021

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External resources

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