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Finland pivots to LNG as Russia cuts gas supply
A subsidiary of Gasgrid Finland has signed a charter deal with US-based Excelerate Energy for a floating storage and regasification vessel (FSRU) to support LNG imports to southern Finland, following the halt of the Russian gas supply
Gazprom Export cut the natural gas supply to Finland on 21 May.
To ensure a gas supply, state-owned Gasum said it would serve customers during the upcoming summer season from other sources through the Balticconnector pipeline. Gasum’s gas filling stations in the gas network area will continue normal operation.
Gasum chief executive Mika Wiljanen said, “It is highly regrettable natural gas supplies under our supply contract will now be halted. However, we have been carefully preparing for this situation and, provided there are no disruptions in the gas transmission network, we will be able to supply all our customers with gas in the coming months.”
The move by Russia comes in the wake of Finland and Sweden applying for membership in NATO. Additionally, Finland reportedly refused to pay for its gas supply contracts in rubles as demanded.
FSRU charter
The 10-year charter agreement between Excelerate and Gasgrid Finland, signed 20 May, will provide LNG supply to Finland, Estonia, and the Baltic Sea region.
Excelerate president and chief executive Steven Kobos, Gasgrid Finland chief executive Olli Sipilä and Gasgrid Finland board chairman Kai-Petteri Purhonen signed the contract at the Government Palace in Helsinki in a ceremony also attended by Minister of Finance Annika Saarikko, Director-General for Energy Riku Huttunen, and US Ambassador to Finland Douglas Hickey.
Under the time charter party agreement, Excelerate will deploy its FSRU Exemplar to provide regasification services in southern Finland. Exemplar has storage capacity of 150,900 m3 of LNG and can provide more than 5 billion cubic meters per year of regasification capacity.
Per the co-operation agreement signed 4 May between Gasgrid Finland and Estonia’s gas transmission operator Elering AS, the FSRU may be located in an Estonian port this winter if the port structures are not yet completed in Finland. The governments of Finland and Estonia published a memorandum of understanding on 29 April agreeing to jointly lease an FSRU.
“Flexible access to LNG is a critical component of European energy security,” said Mr Kobos. “We are honored to collaborate with Gasgrid Finland to deliver essential energy infrastructure that will benefit Finland and more broadly the Baltic Sea region. As a leader in flexible LNG solutions, Excelerate is proud to support the goals of the US-EU Task Force for Energy Security, which include diversifying LNG supplies in alignment with climate objectives.”
Noting it was accomplished on a “fast schedule,” Mr Sipilä said the “project requires seamless co-operation between different actors and the project is progressing as planned. Leasing an LNG terminal vessel is extremely important, as it ensures security of supply for gas supplies in both Finland and Estonia. On the other hand, we see there is a need for the terminal in the wider Baltic Sea region and it has been received with interest. In a tweet, Mr Silpilä noted the signing of the project for the LNG terminal allows the country to “prepare for the end of Russian gas imports in the morning” and lays the groundwork to make “Finland one of the leading countries in the hydrogen economy.”
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