New gas pipeline to link Estonia, Finland granted funding

Helsinki / AFP

A sub-sea gas pipeline planned to link Finland and Estonia moved closer to reality on Friday as the European Commission promised to fund the project to ease the region’s dependence on Russian gas.
“The allocated grants will cover, among others, the construction of the Balticconnector, the first bi-directional sub-sea gas pipeline between Estonia and Finland,” the EU commission said in a statement.
The EU support for the project amounts to 75 percent or 187.5 million euros of the needed 250 million euros ($209 million of $278 million).
The pipeline, planned to be in use by 2020, is meant to link Finland to the European gas market while also reducing Finland’s dependence on gas imports from its powerful neighbour Russia, currently its only gas supplier.
“This is a historic day for Finland’s energy markets and I give my full support to the Balticconnector Ltd to carry the project through,” Finland’s Minister of Economic Affairs Olli Rehn said in a statement.
The Commission said the three Baltic States, Estonia, Latvia and Lithuania, would also benefit from the pipe.
“Balticconnector will enhance the security of supply in the Eastern Baltic Sea region. It will provide for the diversification of sources and routes,” it wrote.
The Baltic states’ dependency on Russian gas was partly reduced in January 2015, when Lithuania broke the Russian monopoly on gas deliveries by launching its first floating LNG terminal in the port of Klaipeda.
Gas is expected to account for some eight percent of Finland’s energy consumption this year, after gas consumption contracted by 16% last year, mainly due to its high price.
But around 60 percent of the value of Finland’s overall energy imports still came from Russia in 2015.
The Ukraine crisis has prompted the EU to speed up its plans to cut dependence on Russian gas.
But the goal is undermined by German plans for a second pipeline, Nord Stream 2, to carry more Russian gas to Central Europe under the Baltic Sea.