Limited interest in Finnish Inkoo LNG slots for 2025
The operator of Finland's Inkoo LNG terminal sold only half the 2025 slots offered this summer, with market participants citing high costs and an extensive maintenance schedule.
Operator Floating LNG Terminal Finland (FLTF) allocated only 11 of 22 slots of 950GWh offered for 2025 during its annual procedure on 15 July-15 August.
How slots are distributed is still being determined, as "at this stage, reservations have been made according to the number of slots, and only at the scheduling stage will we see how the reserved slots will be scheduled for next year", FLTF commercial manager Rasmus Hellman said. "The terminal hopes that the slots will be evenly distributed throughout the year."
Concerns over ice build-up mean there is usually little demand for first-quarter slots, with none booked during the terminal's first few months of operation at the start of 2023. Last winter was exceptional in that the Balticconnector pipeline was offline in October 2023-April 2024 following a rupture caused by a dragging anchor. This meant Inkoo was fully utilised during the period.
With Balticconnector's return, Finland's import needs will be much lower this winter, particularly with stocks at Latvia's Incukalns facility high for this time of year at 17.8TWh as of Monday morning. This is still below last year's peak of nearly 18.8TWh on the same date, but well above the 2014-22 average of 13.9TWh.
That said, several market participants noted that one or two slots could still be booked for the first quarter, as Balticconnector's capacity towards Finland is only 70 GWh/d, and on particularly cold days Finnish demand can spike to 131GWh — as on 4 January this year (see data and download). Given Finland's lack of domestic storage, the terminal might be needed to help to balance the system during such cold snaps. Cargoes in the first quarter come at a much higher cost because only the highest ice-class vessels — controlled by just a few owners — can deliver to Inkoo. These slots can be booked at shorter notice, based on weather conditions or profitability, market participants said.
Market participants pointed to Inkoo's high costs as the most significant deterrent, with a regasification tariff of €2.46/MWh as well as a €10,000 loading fee and other charges not levied at other terminals. Several also noted Inkoo's limited flexibility — the 151,000m³ Exemplar FSRU is smaller than Klaipeda's 170,000m³ Independence FSRU, leaving less scope to use Inkoo for storage because it has to be virtually emptied before a new cargo can be discharged. And fuel gas rates are a significant expense. If regasification nominations are above 64 GWh/d, fuel gas costs are capped at 3pc, with the operator paying the rest. But if regasification is below this level, the user is responsible for all fuel gas consumed, Hellman told Argus.
A third concern at Inkoo is its 2025 maintenance schedule — the Exemplar's drydocking will take the terminal off line on 14 August-31 September, while Balticconnector maintenance will also limit terminal utilisation, with just 5 GWh/d of capacity from Finland to Estonia available in June. An inability to send much gas south for storage or sale in the Baltic states means sendout must fall to the low levels that can be absorbed by the Finnish market — Inkoo sendout dropped to 32 GWh/d during similar maintenance in July this year from 87 GWh/d in June. With the drydocking, terminal utilisation will be severely curtailed for around 75 days next year.
Market participants cite other difficulties with using Inkoo, including limited daylight hours and wind restrictions. Strong winds delayed a delivery in February, causing commercial stocks at the terminal to fall to dangerously low levels.
Almost all market participants surveyed by Argus said many of the difficulties at Inkoo do not apply at Klaipeda, where the regasification tariff is also 29pc lower, at €1.84/MWh for 2025. But there is a lack of available slots at Klaipeda because of heavy long-term bookings, and at times severe capacity bottlenecks develop at the Latvian border point of Kiemenai, which can have similar effects on terminal utilisation as the Balticconnector does for Inkoo.
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