Estonia, Finland to joint lease FSRU

Estonia's Elering and Gasgrid Finland signed an agreement on May 4 to jointly lease a floating storage and regasification unit (FSRU), the companies said in a statement.

The FSRU is expected up and running next winter, and will be stationed on Finland's south coast, or initially in Estonia if needed gas infrastructure in Finland is not ready by then. The two countries view the LNG import project as the fastest means of cutting Russian gas supply as quickly as possible.

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Estonia, which already benefits from access to the Klaipeda regasification terminal in Lithuania, has vowed to end Russian gas imports by the end of the year, while Finland's government said in April it could sever energy ties with Russia within months rather than years.

The two countries' gas markets are connected via the 2.6bn m³/yr Balticconnector pipeline, launched at the start of 2020, which could in theory provide Finland with enough gas to fully satisfy its needs.

Gasgrid Finland CEO Olli Sipila said the FSRU project was "progressing as planned", praising "the rapid response of the Finnish and Estonian governments to the changed situation." The two states signed a memorandum on renting an FSRU in late April. 

"The common LNG terminal is the next step in the list of cooperation projects to ensure the security of supply for Estonian and Finnish consumers," Elering CEO Taavi Veskimagi commented.

Estonia and Finland are also bracing for a potential cut-off in gas supply by Russia. Moscow halted supplies to Bulgaria and Poland in late April, after their refusal to comply with a Russian decree requiring payment for Russian gas for rubles, through forced conversion of other currencies at Gazprombank. Estonia and Finland too have said they will not follow the decree, putting them at risk of similar action when their bills are due to be paid.

In Finland's case, there is an added risk that Russia might cut gas supply in response to the country applying for NATO membership. According to Reuters, the government will decide whether to apply on May 12.