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Economy Ministry contests report recommending LNG terminal be constructed in Estonia

Daniels Pavluts. Photo: Edijs Palens/LETA.
 RIGA, Nov 23  - The report by the consulting firm hired by the European Commission for the assessment of the best location for construction of the Baltic region's liquefied natural gas (LNG) terminal, foresees a considerably more expensive LNG terminal project, thus Economy Minister Daniels Pavluts has sent a letter to European Commission Energy Commissioner Guenther Oettinger pointing out to the shortcomings in the report.
The Economy Ministry points out that Latvia is bewildered why economic advantages were not the main criteria in the report.
''Unfortunately, the solution offered by the consulting firm will most likely lead to an increase in natural gas tariffs for Latvian consumers, as additional and substantial investments in infrastructure will be necessary,'' Pavluts points out.
Such an expensive project is unreasonable, according to the Economy Ministry, as there are other possibilities in constructing a much more cost effective LNG terminal.
Thus, Pavluts has sent a letter to European Commission Energy Commissioner Guenther Oettinger, pointing out that it is in the whole region's interests to implement the most cost effective project possible. The letter also points out that additional investments would not be needed in Latvia to gas supply infrastructure, thus consumers would not need to pay for the most expensive solution.
As reported, "Booz&Company", a consulting firm hired by the European Commission for the assessment of the best location for construction of the Baltic region's liquefied natural gas terminal, says in its final report that building the terminal in Estonia would achieve a number of advantages, adding that building the terminal in Finland would have similar advantages.
Given that all three Baltic countries must attain the same diversification objectives and meet the relevant security requirements, building the terminal in Estonia would minimize the need for further network upgrades and optimize gas flows, says the consulting firm.
According to the final report, building the terminal in Estonia's Paldiski Port would minimize the need for additional investments, which would otherwise be necessary to link the terminal to gas transport systems and make the benefits from diversification of gas supplies equal.
"Booz&Company" has concluded that building the terminal in Finland would also accomplish the European Commission's goals and give the same advantages as building the terminal in Estonia. However, Finland's demand for gas is currently fully covered by Russia's "Gazprom", and Finland will not need the gas terminal until 2025.
The decision on where the terminal is to be built will be taken by the Baltic Energy Market Interconnection Plan countries, based on the "Booz&Company" findings.
leta.lv
24-11-2012
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