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Friday 21.09.2018 | Name days: Matīss, Modris, Mariss

Economics Minister: LNG terminal location choice – not connected with feud

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RU, Artis Kampars

The Economics Minister Artis Kampars

When assessing the potential liquefied natural gas (LNG) terminal location in Latvia, the objective is not to benefit or revenge. Moreover, the cheapest and most advantageous solution possible will be chosen, the Economics Minister Artis Kampars pointed out.

Considering the «regional jealousy», the Minister refrained to specify the terminal’s location, until AS Latvenergo’s analysis and estimates are not received. However, he wanted to clear up any concerns about the assessment objectivity.

As reported, last week the Board Chairman of Ventspils Free Port and Ventspils Mayor Aivars Lembergs emphasized at the weekly press conference the benefits of constructing such a terminal. To his mind, they are: ice-free port, the geographical location and Ventspils Port’s experience in liquefied gas storage and handling. Besides, Lembergs is surprised by the task of drafting the LNG terminal project solutions for Riga Port. In Lembergs’ view, two ports – Ventspils and Klaipeda– should be definitely considered.

On the other hand, Kampars mentioned the infrastructure built during the Soviet times was intended with Riga as the centre. However, he used this argument to ensure Latvia as the potential LNG location in the Baltic States. Kampars indicated the infrastructure has to be changed in order to build such a terminal in Estonia or Lithuania.

The Minister also pointed out Latvia is the only place with an underground storage facility. Such a terminal cannot function in the long term without underground storage, and the possibility of a new facility is excluded.

While the third argument in favour of Latvia is the opportunity to ship gas to a location relatively close to Inčukalns.

Partners in other Baltic States fear the project could be implemented by businesses affiliated with the Russian gas companies, but this risk factor is now prevented. Yet another risk factor is the management structure, but it is averted as well. Any investor understands why the research was assigned to Latvenergo – the company can consume up to 40% of the total gas consumption in Latvia, Kampars explains.

He hopes the assessment will be ready in May. Asked when the European Commission’s (EC) decision on fund allocation will be announced, the Minister informed that in June-July the EC will propose ideas of using funds for the next financial period, followed by lengthy and serious negotiations. At that time, there should already be clarity that the project will provide energy security in the Baltics and offer alternative supply channels, as well as on the project costs, solutions etc.

At that point we will explain and show how much it will cost and how much we are going to ask from the EC. Most likely, we will visit potential investors all across the world. Then a detailed assessment of the environment and everything else will be carried out. If the EC funds are granted in the next financial period (in 2014), the construction could start that year and finish in the 2016–2017, cites Kampars.

Regarding gas, Kampars believes it can come from any country ready to export it, including Russia; however, if the terminal is operated by a company connected to Russia, various conditions could be imposed.

It is important that when any issues arise about relations with Russia, we can calmly, without any problems, transport gas, for instance, from Norway, Qatar, or Oman. These countries have also actively and directly expressed their interest in financing such a project. Of course, there will be complicated negotiations on the conditions, as these countries require a certain volume to be purchased at a particular period of time, the Minister notes.

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