The Finnish government said they have to start over with the joint project with Estonia after the EU Commission said a proposed two-terminal model would not be eligible for subsidies.
Estonia and Finland proposed in February to build two new LNG terminals on either side of the Gulf of Finland with a pipeline connecting the two countries. They reached an agreement to act jointly after competing for more than a year over a project to build an LNG terminal.
“The European Commission did not approve the model proposed to them,” Esa Harmala, head of the energy department at Finland’s economy ministry said on Wednesday, reports Reuters.
He also added that this might not mean that the two-terminal model was completely out of option. Ministry said in a statements that the negotiations are continuing next month.
A single LNG terminal would cost around 500 million euros ($680 million), according to analysts, and would provide an alternative to gas supplies from Russia. A pipeline that would allow Finland and Estonia to share imports would cost some 100 million euros.
The European Union could fund up to 40 percent of a regional terminal provided it serves the interests of more than one country, and there are several Baltic states vying for funds according to Reuters.
Crisis in Ukraine urged the EU governments to look for ways of reducing their dependence on energy imports from Russia.
LNG World News Staff, June 19, 2014; Image: Gasum