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Alexela asks 344 mln euros from EU for Paldiski LNG terminal

BC, Tallinn, 16.10.2015.Print version
Despite the lack of consent from the Finnish and Latvian market regulators, Estonian energy company Alexela submitted an application to the Connecting Europe Facility (CEF) to support the Paldiski liquefied natural gas (LNG) terminal with 344 million euros, LETA/Postimees Online reports.

Alexela's board member Marti Hääl said that the Finnish Gasum gave up plans to build the terminal just two weeks before the deadline for applications for the CEF, yet Alexela managed to prepare the application in that short time.


Alexela continued its terminal project development at the time when Estonia was had given Finland a mandate to establish a regional terminal, the company announced today. "As market participants, it was clear for us already when that decision was made that the Finns do not actually have a wish to build that terminal in the coming years," said Hääl.


Hääl said that, despite the work that was done, it is possible that the Paldiski LNG terminal won't get EU financial assistance. "At a time when the Paldiski LNG terminal project has received approval from the Ministry of Environment as well as Ministry of Economy, market regulators did not reach an agreement by yesterday," he said.


"To our knowledge, the Finnish energy market regulator refused to take a position regarding Alexela's application. However, the prime ministers of the two countries signed already in the autumn of 2014 an agreement, according to which, if Finland gave up, the support of states regarding the construction of the regional LNG terminal was to go to Estonia," said Hääl.


Alexela submitted the application to the Competition Authority in October 2013. The application did not ask for payment of the investment – via gas transmission main grid fees – any contribution from any state's gas consumers, announced Alexela. The company estimates that the Competition Authority has not been able to make the colleagues of their neighbouring states understand that.


Despite the failure of cooperation of the market regulators, the company expects to obtain clarity regarding the EU financing in the coming months, announced Alexela. "Alexela has by now submitted all the necessary applications and made every effort to realize the project," said Hääl.


Alexela has so far invested ten million euros in the preparatory works of the project. Alexela LNG terminal project includes the ability to receive and unload ocean ships, a 160,000 cubic meters liquefied natural gas storage facility with the possibility of expanding it to 320,000 cubic meters, LNG regasification facilities and LNG loading ability for smaller vessels, trucks and railcars.


Public Broadcasting reports that Estonian Competition Board does not believe that the European Commission would look at Alexela's project without the approval of regulators of Finland and Latvia. "Since this is a project of common interest, when they get a chance to use the LNG terminal, in the framework of these common interest projects, certain costs are calculated for the benefitting state that not covered by subsidies," said Competition Board energy and postal department director Margus Kasepalu.

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