Bloomberg News

Estonia’s Elering, Muuga Port Operator to Study New LNG Terminal

December 06, 2011

Dec. 5 (Bloomberg) -- AS Elering, Estonia’s power grid operator, and AS Tallinna Sadam, the country’s biggest port owner, agreed to start preliminary studies for building a liquefied natural gas terminal at Muuga port near Tallinn.

The two companies will conduct environmental and feasibility studies for a facility serving the Baltic region, state-owned Elering said in an e-mailed statement in Tallinn today. They will also study possible financing for the project with European Union aid or funds from third parties.

Estonia, Latvia and Lithuania last month asked the European Commission to help decide if a regional LNG terminal is needed and where to build it after they failed to agree on a common location. A study by a unit of Poeyry Oyj, a Finnish engineering company commissioned by the Estonian government, concluded that Estonia would be the best location for the three countries, Prime Minister Andrus Ansip said on Nov. 10.

“Based on stricter environmental requirements of the European Union and the International Maritime Organization in the shipping sector from 2015, we expect demand for LNG to emerge in shipping,” Erik Ringmaa, the commercial head of Tallinna Sadam, said in the statement. “To keep our positions, we understandably will have to create the options for LNG bunkering.”

By merging the terminal and LNG bunkering projects, the port expects to achieve significant synergies, the company said.

OAO Gazprom, Russia’s gas export monopoly, is the sole supplier of natural gas to Estonia, Latvia and Lithuania.

The three countries have uneasy political relations with their larger neighbor and are seeking EU support for an LNG terminal in the region, citing supply risks and higher gas prices than in western Europe.

--Editors: James Kraus, Tim Farrand

To contact the reporter on this story: Ott Ummelas in Tallinn at oummelas@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net


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