Alexela trying to inflate Paldiski price: Estonian PM

Infrastructure holding company Alexela might be using a recent dispute with Estonian gas grid operator Elering to increase the sales price of the Paldiski quay, Estonian prime minister Kaja Kallas said yesterday.

The Estonian government is negotiating to buy the quay from Alexela and has set aside €38mn for the purchase. Estonia wants to pay a value equal to construction costs, but the holding company is angling for a higher price, Kallas said.

"The company wants to show how their business got spoiled — that they can't bring in this ship and consequently this cost is higher and consequently the state should pay more," she said.

Alexela and Infortar want to bring a floating storage and regasification unit (FSRU) to Paldiski, but say Elering has failed to complete a pipeline connection between the quay and the grid, Infortar chief executive Martti Talgre has said.

Elering denied this allegation yesterday, and Kallas also said this was "not true".

According to Kallas, the firms had said all summer that they would not bring an FSRU to Paldiski and had not filed a connection request, saying it did not make economic sense. But Alexela and Infortar "are now changing their mind" and allege that Elering's construction is stopping them from bringing an FSRU to Paldiski, Kallas said.

The state has contributed to the gas supply situation in which Estonia finds itself, but the private sector is also partly responsible, Kallas said. The government does not expect a gas shortage this winter, as the Exemplar FSRU in Finland and the Balticconnector pipeline will cover Estonian demand, so it remains unclear whether Estonia actually needs its own FSRU, she said.

Estonian economy minister Riina Sikkut has previously expressed support for Estonia renting an FSRU, but Kallas said this was not essential for the country's security of supply.

By Brendan A'Hearn