EU says no to Gasum, Alexela joint LNG project

Studies concerning alternative collaboration models for Gulf of Finland LNG terminal, conducted by Gasum of Finland and Alexela Energy, have not yielded any commercially viable options within the planned investment aid indicated by the EU Commission.

In February, on the request of the European Commission, Gasum and Alexela signed a Memorandum of Understanding on further feasibility studies concerning the regional LNG terminal project in order to map out possible modes of collaboration by the end of May. The companies presented their plans in June, but the European Commission did not find them viable for investment aid. Consequently, the parties have at the European Commission’s request designed several alternative collaboration models for the implementation of the import terminal.

During the negotiations it emerged that the amount of EU investment aid available for the terminal is significantly smaller than had previously been known. The companies have evaluated several different options concerning a variety of collaboration models, but none of these proved to be commercially viable at the support levels indicated by the European Commission.

”The negotiations were conducted in good spirit, but unfortunately, we were unable to reach a financially viable solution with the level of EU investment aid available. To be realized, all of the presented models would have required significant EU investment aid, which was not available,” says Gasum CEO Johanna Lamminen.

Gasum will now continue to further its own terminal project independently. The final location of the terminal, the amount of investment and the scheduling will be revised in the development work.

“There is a need for an import terminal in Southern Finland to ensure and diversify our customers’ access to LNG in this region for shipping and industry alike. Once completed, the terminal would also enable alternative sourcing for pipeline gas,” Lamminen says.

Press Release, October 2, 2014; Image: Gasum