Estonia buys Paldiski LNG quay from Alexela

Estonian state stockpiling agency Espa has purchased the LNG quay, port infrastructure and property at Paldiski for €31.5mn, excluding VAT, the company said today.

The Estonian government increased Espa's share capital by €38mn at the end of February to complete the transaction. The purchase fulfilled a government pledge to buy those assets from Alexela and Infortar, the companies that built and previously owned the quay, if the commercial prospects for the project changed significantly, Espa said.

The purchase will help create an "independent gas security of supply solution" for Estonia managed by state-owned transmission system operator Elering, which built the connecting pipeline to the grid.

It is now Elering's job to prepare the harbour to potentially connect a vessel by the end of autumn this year, Espa chairman Ando Leppiman said.

The government paid a price "much lower" than construction costs for the quay, but now state-owned companies are solely responsible for supplying the terminal and capacity to receive LNG could be in place by the next heating season, Alexela chairman Marti Haal said.

Alexela in November last year claimed it had lined up a potential vessel to use at Paldiski, but subsequently provided no technical details to Elering.

Elering last month announced plans to purchase a marine loading arm that should help expedite connections to a future vessel at Paldiski.

The purchase of the quay comes after a public dispute between Elering and Alexela over which party was responsible for building connecting infrastructure. Estonian prime minister Kaja Kallas had also accused Alexela of trying to inflate the price of the quay. Alexela subsequently sought more than €500,000 in monthly rent from Elering for gas infrastructure located on the owner's property.

New gas levy

Separately, Estonian economic affairs minister Riina Sikkut today submitted a draft proposal to introduce a reserve levy of roughly 0.5pc on consumer gas bills.

Espa would use revenue from the levy to cover the cost of storing, insuring and managing the national gas reserve it recently acquired.

By Brendan A'Hearn