Lease of LNG terminal ship to reduce reliance on Russian gas

The Government’s Ministerial Committee on Economic Policy on Thursday recommended that Finland lease a large liquefied natural gas (LNG) terminal ship in cooperation with Estonia, said a government press release.

Leasing a terminal ship enables Finland to become independent of Russian pipeline gas.

“As a result of the war in Ukraine, we must also be prepared for gas imports to stop. A floating LNG terminal is an effective way to secure the gas supply for our industry. I would like to thank the Estonian government for the seamless cooperation,” said Minister of Economic Affairs Mika Lintilä.

The Ministry of Economic Affairs and Employment, in cooperation with the Ministry of Finance and the Estonian ministry responsible for energy issues, will continue to prepare the leasing of an LNG terminal ship and will shortly submit the leasing proposal to the Ministerial Committee on Economic Policy for its decision.

The Ministry of Finance will task the gas transmission operator Gasgrid Finland Oy with assessing and negotiating, in cooperation with the Estonian transmission network company Elering AS, the terms for leasing an LNG terminal ship and with implementing the project as fast as possible to guarantee preparedness and security of gas supply, in particular.

According to the Ministry of Economic Affairs and Employment, the only way to quickly become independent of Russian pipeline gas is to lease a large LNG terminal ship (a floating storage and regasification unit, FSRU), which would be located on the coast of Finland in the immediate vicinity of the natural gas transmission network.

In cooperation with the Ministry of Finance, the Ministry of Economic Affairs and Employment requested that Gasgrid Finland investigate the procurement of such a vessel at the end of March.

The Estonian ministry offered cooperation to the Ministry of Economic Affairs and Employment because of the plans to build a port suitable for an LNG terminal in Paldiski in Estonia. The aim is to implement the project extremely quickly. Negotiations on the ship are ongoing in cooperation between Gasgrid Finland Oy and Elering AS.

The LNG terminal ship will be connected to the natural gas transmission network in its final location in southern Finland. It is important that the ship would be available for use next winter with as much certainty as possible. It would be placed in Paldiski next winter if the port construction work in Finland has not been done by that time.

The majority of the ownership and voting rights of the company operating the LNG terminal ship will remain with Gasgrid Finland Oy or the State of Finland.

If necessary, the State may capitalise Gasgrid Finland Oy if the operations of the company operating the LNG terminal ship become commercially unprofitable.