Finland’s Gasgrid inks 10-year FSRU charter deal with Excelerate

Finland’s Gasgrid has signed a 10-year deal to charter one FSRU from US LNG player Excelerate, as Finland, Estonia and other Baltic states look to phase out Russian gas supplies.

Under the deal, Excelerate would provide its 150,900-cbm Exemplar that can supply more than 5 billion cubic meters per year of regasification capacity, it said in a statement on Friday.

Estonia and Finland previously revealed plans to jointly charter an FSRU to import LNG and signed a memorandum of understanding.

Under a cooperation deal signed on May 4 by Gasgrid Finland and Estonia’s gas transmission operator Elering, the FSRU may first work in an Estonian port this winter.

This depends on the completion of the port structures in southern Finland, Excelerate said.

Excelerate’s 2010-built Exemplar is currently in Bahia Blanca, Argentina, to deliver regasified LNG during the winter peak demand in the country.

Costs to reach $487 million

Gasgrid said in a separate statement that it expects the total cost of the LNG terminal project with the 10-year lease to reach 460 million euros ($487 million).

This does not include costs associated with the volume of use, it said.

Although the final location would be in southern Finland, new port structures suitable for the terminal vessel would be built on the coasts of both Finland and Estonia, Gasgrid said.

The partners are yet to determine the final locations. Previously planned locations included Paldiski in Estonia and Inkoo in Finland.

Gasgrid said the storage and supply capacity of the FSRU can meet the gas needs of both Finland and Estonia.

With this deal, Finland and Estonia have joined the club of European countries such as Germany, the Netherlands, and others who have chartered FSRUs as part of plans to reduce reliance on pipeline supplies from Russia.

Gazprom Export to cut off supplies to Finland

The governments of the two countries previously said that the Baltic and Finnish regions received about half of their supplies via Russian gas deliveries.

Finland consumes roughly 23 terawatt-hours (TWh) and Estonia 5 TWh of gas per year.

Natural gas accounts for about 5 percent of Finland’s total energy consumption and is mainly used in industrial processes, heavy transport and the cogeneration of electricity and heat, Gasgrid said.

However, the terminal secures Finland’s gas supply not only for industry but also for households, it said.

This new annoucment came out the same day when Finland’s natural gas and LNG supplier, Gasum, said that Gazprom Export, a unit of Russia’s Gazprom, would cut off pipeline supplies to the country as of May 21.

The firm recently said it would take its dispute over ruble payments with Gazprom Export to arbitration proceedings.

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