Finland and Estonia Replace Russian Gas with FSRU Charter
Finland working with neighboring Estonia has become the latest countries to charter a floating storage and regasification vessel (FSRU) in the effort to end its reliance on Russian gas imports. U.S.-based LNG company Excelerate Energy will be charting the floating LNG terminal to Gasgrid Finland reporting that it will provide sufficient capacity to totally replace Russian supplies to Finland and Estonia and possibly provide excess capacity that can be used by other Baltic nations.
Under the terms of a 10-year charter agreement, Excelerate will deploy its FSRU Exemplar (83,000 dwt) to provide regasification services in southern Finland. The Exemplar which is one of the company’s 10 FSRUs, has a storage capacity of 150,900 cbm of LNG and can provide more than five billion cubic meters per year of regasification capacity.
Excelerate’s CEO Steven Kobos told Bloomberg in an interview that Finland and Estonia use approximately three billion cubic meters. He said with the delivery of 52 cargoes they would be able to process around five billion cubic meters meaning that they would have an additional capacity that could be used by other countries in the region.
“We are glad that we were able to sign the agreement on such a fast schedule,” said Olli Sipilä, CEO of Gasgrid Finland which will be responsible for the distribution of the gas. “The project requires seamless cooperation between different actors as well in the future, 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.”
The Governments of Finland and Estonia published a memorandum of understanding on April 29 agreeing to jointly lease an FSRU. Gasgrid Finland and Estonia’s gas transmission operator Elering agreed to work together for the distribution of the gas to customers.
The FSRU unit is currently deployed in Argentina and the plan calls for it to depart for Europe at the end of the winter season in South America. Finland is currently working to develop port facilities to support the FSRU. Under the agreement between the two gas companies, the vessel may be docked in an Estonian port this winter if the port structures are not yet completed in Finland.
The Baltic states join both Germany and the Netherlands which also announced this month plans to deploy FSRUs to replace a portion of their gas imports from Russia. The German federal government announced plans at the beginning of May to invest $3 billion to develop the country’s LNG terminal capacity. Energy giants RWE and Uniper are both involved with Uniper chartering two FSRUs from Dynagas and developing a terminal facility in Wilhelmshaven. RWE is chartering two vessels from Höegh LNG. The Netherlands through its state-owned energy company Gasunie has also agreed to charter FSRUs from New Fortress Energy and Exmar.