Tallinn, Estonia Best Location for Multi-customer, Open Access Regional LNG terminal
Vopak LNG believes that Tallinn, Estonia can become a regional hub for liquefied natural gas (LNG) with an open access regional terminal in the port of Muuga.
Last May Elering and Tallinna Sadam chose Vopak LNG, an LNG focused subsidiary of the world’s leading independent provider of conditioned storage facilities for bulk liquids Royal Vopak, as their international strategic partner for the liquefied natural gas (LNG) terminal planned at Muuga.
The three parts undertook a feasibility study on the terminal planned, identifying the costs of the project, the need for funding from the EU and the technical and economic parameters of the project. Such study was envisaged to convince the European Commission of the suitability of Tallinn to be the location of the regional LNG terminal that the Baltic states plan to develop jointly.
“The region needs a hub and Tallinn offers the best characteristics for such a regional infrastructure. Muuga’s LNG terminal potential is of around 90,000 cm3 and we believe it can solve all the energy related regional problems,” Joop Jonkers, Manager Business Development at Vopak LNG Holding B.V, said during a conference in Tallinn.
Current figures show that LNG imports come mainly from Qatar (48%), Nigeria (17%) and Egypt (6%). In this regard, Qatari ships are too large for the region’s port, and Jonkers sees Tallinn’s future LNG terminal as the best location to welcome them. However, he stressed that the Baltic region can only host one such large infrastructure, and that that should be complemented with small-scale storage facilities the serve national demands.
“Muuga Port holds a huge development potential for services like berthing, cargo loading, LNG storage, transshipment, marine and truck loading, provision of LNG fuel to the transport sector, etc.,” Jonkers said, stressing the fact that the port is an established facility in a very suitable location with an adequate safety distance to surrounding installations and residential areas and easy prospects to build an natural gas pipeline to be connected to Estonia’s national grid.
Vopak LNG aims at developing a sharing terminal infrastructure that will offer non-discriminatory access to all interested gas suppliers and off-takers. Jonker said that such business model “helps to keep the costs to a minimum, as well as to enable customers to focus on their own business. Being a terminal operator does not mean to hold a title to store in the facility.”
Building an LNG terminal is part of Estonia’s strategy to reduce dependence on Russia’s supplies. Estonia, Latvia and Lithuania, where Gazprom is the sole supplier of gas, have uneasy political relations with their larger neighbor and point to supply risks and higher natural-gas prices than in Western Europe.