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Latvijas Gaze: regional LNG terminal should be built in Estonia

Alla Petrova, BC, Riga, 06.07.2012.Print version
It will be best if the regional liquefied natural gas terminal is built in Estonia, also involving Finland in the project, as Latvijas Gaze gas supply company CEO Adrians Davis said at the company's shareholders meeting today.

In an interview with later, Davis corrected himself by saying that he considered such a decision, suggested by a consulting company hired by the European Commission, acceptable.


In Davis' opinion, there is no need for dividing the Baltic countries in this particular case, because Latvia, Lithuania and Estonia are all members of the Baltic region, and it is of practically no importance where the terminal will be built with the European Union's co-funding. There is no need for any Baltic country to be "a dog in the manger", said Davis.


Latvijas Gaze CEO also said that the economic aspect must be considered. Latvia already has a huge gas infrastructure facility, the underground gas storage facility in Incukalns. Its maintenance is very costly. If Latvia also builds a large terminal, part of its maintenance costs will have to be covered by consumers in Latvia, said Davis, adding that building the terminal would require enormous investments, which would need to be returned.


Davis believes that, given the Incukalns storage facility in Latvia, it would be a correct decision to build the terminal in Estonia.


Asked to comment if it was all the same to Latvijas Gaze if the terminal was located in Latvia or Estonia in terms of gas transportation, Davis said that he was speaking not on behalf of his company but as a resident of Latvia doing his civic duty. "We must think not only about consumers but also about pensioners and the new generation. I have grandchildren, and I want them to be well-off and not paying too much for gas," said Davis.


During the Latvijas Gaze shareholders meeting today, Davis said that the debates about construction of the liquefied gas terminal were continuing for the fifth year already, but the final decision would be taken by the European Commission.


Davis also showed the participants in the meeting a map with several possible locations for construction of the terminal, and said he hoped that the terminal would be built in Paldiski.


Davis said that, according to the current plans, a huge terminal would be built with annual capacity of around 4 billion cubic meters. In this case, the terminal will have to rely on the Incukalns underground gas storage facility, which will have to be expanded.

In June, consulting company Booz&Company, hired by the European Commission to do a research for determining the best location for building the terminal, presented its interim report to participants in the Baltic Energy Market Interconnection Plan (BEMIP).


The interim report is classified, however, the Union of Greens and Farmers announced that, based on unofficial information, Booz&Company considers Estonia to be the best location for building the terminal. has information though that the research by Booz&Companby also incorporates Finland, not just the three Baltic countries.


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