Infortar joins Alexela’s Paldiski LNG import project in Estonia

Estonian investment firm Infortar is joining forces with compatriot energy company Alexela to develop the FSRU-based LNG import terminal in Paldiski, as the country looks to phase out Russian gas supplies.

The common goal of the two Estonian companies is to launch the LNG terminal by November this year and thus ensure the security of supply to consumers, Alexela and Infortar said in a joint statement last week.

Earlier this month, Estonia and Finland agreed to jointly charter one floating storage and regasification unit (FSRU) to import LNG.

The two countries have agreed to build jetties on both sides of the Gulf of Finland, in Paldiski in Estonia and Inkoo in Finland.

FSRU charter and infrastructure work

Alexela has been working on the Paldiski LNG import terminal for years.

According to the new joint statement, the project includes two stages.

The first phase includes the construction of a connection between the jetty and Balticconnector pipeline, as well as the charter of the FSRU.

Also, the partners would build a “permanent solution for the terminal” in the second phase.

The statement said the cost of the terminal infrastructure for the first phase would reach 40 million euros ($43.2 million).

This month, dredging and construction of the mooring pit will begin in Pakrineeme as well.

“Negotiations are underway on the lease of a floating terminal, a tender for construction will be completed in the coming days, and the first prepayments for the supply of building materials have been made,” the statement said.

Alexela and Infortar did not reveal the planned capacity of the development.

Estonia, Finland, and Latvia

The two firms are also cooperating with Latvian and Finnish market participants to “ensure energy security in all three countries in the coming heating period.”

In addition to Estonia, the Paldiski LNG terminal would cover at least 80 percent of Finland’s gas needs, the statement said.

Alexela and Infortar are already partners in Eesti Biogas, the largest biomethane company in Estonia.

Besides the Paldiski terminal, Alexela is developing the Hamina LNG import terminal in Finland which should go online this year.

On the other side, Infortar has LNG shipping and fueling experience via Eesti Gaas and Tallink. This includes Estonia’s first LNG bunkering vessel, Optimus.

“In our opinion, the Paldiski LNG terminal must be a public terminal and other market participants and investors are also expected to join it,” said Heiti Hääl, chairman of Alexela’s supervisory board.

“If the government sets a deadline for giving up Russian gas and Elering builds a pipeline connection, the private sector will be able to solve the problem and start the terminal by the beginning of this year’s heating season,” he said.

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