Elering submitted investment request for Balticconnector

On Friday Estonian gas transmission system operator Elering submitted to Estonian and Finnish regulators investment requests for construction of Estonian-Finnish gas interconnector Balticconnector and reinforcement of Estonian-Latvian gas interconnection to be financed as European projects of common interest.

The grant requests to be submitted to the Connecting Europe Facility 2015 call are based on the agreement signed by Estonian and Finnish prime ministers last November aiming at the commissioning of Balticconnector by 2019.

“Unfortunately Elering had to submit the investment request alone at this stage regardless of the several negotiation rounds with Finnish gas incumbent Gasum for moving ahead with Balticconnector project in the frame agreed between prime ministers. It is difficult to understand the motives of Gasum not to join the investment request though the market test of the project indicated great interest of the stakeholders. Also this interconnector is the precondition for the common Baltic-Finnish gas market which would facilitate real competition and increase security of gas supply in both countries.” Taavi Veskimägi, CEO of Elering said. 

As a next step Elering’s aim is to submit the grant application for Works later this year to the European Commission for receiving co-financing up to 75 per cent for the project from the Connecting Europe Facility.
Final investment decision depends on several conditions. Primarily on the liberalisation of the gas market in Finland, (including the unbundling of the dominant gas supplier in Finland, Gasum Oy) and adequate EU grant.

The Balticconnector project composes of 81 km offshore gas transmission pipeline, 22 km Finnish onshore gas transmission pipeline and 47 km Estonian onshore gas transmission pipeline together with compressor stations on either side of the Finnish Gulf. Balticconnector enables gas flows between Estonian and Finnish gas transmission networks up to 7,2 million cubic meters per day.

The total cost of the Balticconnector is 250 million Euros. 130 million Euros will be used in Estonian side. The cost of reinforcement of Estonian-Latvian interconnection is 35 million Euros. Construction costs of the project will be allocated between Estonia and Finland according to the geographical location of investments.