Latvian fuel trader Virši-A said it has signed a deal to buy a 20 percent stake in a planned LNG import facility at the port of Skulte, as the Baltic country looks to diversify its gas supply sources.
Virši and the project developer Skulte LNG Terminal will now work to jointly develop the facility.
“The development of this project will increase the energy independence of Latvia and the Baltic region and will contribute significantly to the diversification of natural gas supplies and the further development of the natural gas market,” the firm said in a statement on Friday.
Latvia currently has no LNG import terminals but its neighbor Lithuania imports LNG via the Klaipeda FSRU, while Estonia also aims to build an LNG terminal in Paldiski and charter an FSRU with Finland, as part of plans to phase out Russian gas supplies.
Earlier this year, Latvia’s energy firm Latvenergo said it would import regasified LNG via the Klaipeda facility.
“The LNG terminal in Skulte as an infrastructure facility in combination with the Inčukalns underground natural gas storage facility is an excellent tandem not only for supplying Latvian consumption, but also for creating competitive natural gas supplies for the wider region, which includes the Baltic States as well as Finland and Poland,” Jānis Vība, CEO of Virši, said in the statement.
FRU connected to underground gas storage
The Skulte LNG terminal project has “unique geographical, economic and technological advantages,” the statement said.
It requires only 34 km of direct pipeline connection to the Inčukalns underground gas storage facility and does not require investment in LNG storage infrastructure, which typically accounts for 70-80 percent of a terminal’s investment, it said.
Established in 2016, Skulte LNG Terminal’s shareholders include the National Gas Terminal Society and Peter A. Ragauss, an entrepreneur with experience in the energy sector in the US market, the statement said.
The terminal developer plans to install a floating regasification unit (FRU) at Skulte port area, 2.5 km offshore from coast line, with pipeline connection to the underground gas storage, according to its website. It would have a capacity of up to 3 mtpa.
Renārs Miķelsons, general manager of Skulte LNG Terminal, said in the statement that the experience, capacity and capability of Virši as a local partner would contribute to a “faster implementation” of the terminal project.
“Skulte LNG Terminal is also continuing negotiations with a pre-selected group of foreign industrial investors on the implementation of the project on the most favorable terms for the Latvian and regional market,” Miķelsons said.