Estonia drops plans for stake in Finnish LNG terminal

Market: Natural gas
03/11/22

The Estonian government has decided to give up on acquiring a stake in the Finnish LNG terminal, and to instead buy the mooring quay at Paldiski.

"At today's cabinet meeting, the ministers decided to abandon the acquisition of a stake in the Finnish LNG terminal" operated by Gasgrid Finland's subsidiary Floating LNG Terminal Finland Oy, the Estonian government said today.

Estonia and Finland previously signed a co-operation agreement stating that the floating storage and regasification unit (FSRU) Exemplar, wholly rented by the Finnish side, will be moored at whichever terminal — either Paldiski in Estonia or Inkoo in Finland — is finished first. But last month, the Estonian and Finnish economy ministries confirmed that Exemplar will be moored at Finland's Inkoo port, while the Finnish side suggested that Estonia would have to buy a stake in the LNG terminal before getting preferential access to it.

Around €30mn has been allocated for the Estonian system operator Elering to participate in the joint project with Finland. This will be used to buy additional gas volumes, said the minister of economy and infrastructure Riina Sikkut.

"There is a possibility under discussion that the first gas cargo arriving to the LNG floating terminal will be offered primarily to the holders of strategic reserves in Estonia, Finland and Latvia. If the price... is good, the conditions are suitable and the purchase increases the supply security of the Estonian market, then it is reasonable to use the opportunity," Sikkut said.

The FSRU at Inkoo is scheduled to receive its commissioning cargo in mid-December, according to the Finnish system operator Gasgrid.

But the Estonian government instead instructed state-run gas stockpiling agency ESPA to buy the mooring quay at Paldiski from construction firms Alexela and Infortar, which according to the country's prime minister Kaja Kallas is "an important" project for Estonia's energy security.

Following today's decision, construction firms will be able to sell the quay to the state "if they wish, even from this year", Kallas said.

Estonia will pay the "proven costs incurred by the developer for the quay this year, the upper limit of which is €30mn", according to Sikkut. "In total, the transaction will cost up to €38mn... and this amount has already been allocated by the government to the gas stockpiling agency ESPA," Sikkut said.

Construction works at Paldiski were completed in late October.

By Eleni Charisi

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

News

20/12/24

US House votes to avert government shutdown

Washington, 20 December (Argus) — The US House of Representatives voted overwhelmingly today to extend funding for US federal government agencies and avoid a partial government shutdown. The Republican-controlled House, by a 366-34 vote, approved a measure that would maintain funding for the government at current levels until 14 March, deliver $10bn in agricultural aid and provide $100bn in disaster relief. Its passage was in doubt until voting began in the House at 5pm ET, following a chaotic intervention two days earlier by president-elect Donald Trump and his allies, including Tesla chief executive Elon Musk. The Democratic-led Senate is expected to approve the measure, and President Joe Biden has promised to sign it. Trump and Musk on 18 December derailed a spending deal House speaker Mike Johnson (R-Louisiana) had negotiated with Democratic lawmakers in the House and the Senate. Trump lobbied for a more streamlined version that would have suspended the ceiling on federal debt until 30 January 2027. But that version of the bill failed in the House on Thursday, because of opposition from 38 Republicans who bucked the preference of their party leader. Trump and Musk opposed the bipartisan spending package, contending that it would fund Democratic priorities, such as rebuilding the collapsed Francis Scott Key Bridge in Baltimore, Maryland. But doing away with that bill killed many other initiatives that his party members have advanced, including a provision authorizing year-round 15pc ethanol gasoline (E15) sales. Depending on the timing of the Senate action and the presidential signature, funding for US government agencies could lapse briefly beginning on Saturday. Key US agencies tasked with energy sector regulatory oversight and permitting activities have indicated that a brief shutdown would not significantly interfere with their operations. But the episode previews potential legislative disarray when Republicans take full control of Congress on 3 January and Trump returns to the White House on 20 January. Extending government funding beyond 14 March is likely to feature as an element in the Republicans' attempts to extend corporate tax cuts set to expire at the end of 2025, which is a key priority for Trump. The Republicans will have a 53-47 majority in the Senate next month, but their hold on the House will be even narrower than this year, at 219-215 initially. Trump has picked two House Republican members to serve in his administration, so the House Republican majority could briefly drop to 217-215 just as funding for the government would expire in mid-March. Congress will separately have to tackle the issue of raising the debt limit. Conservative advocacy group Economic Policy Innovation Center projects that US borrowing could reach that limit as early as June. By Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Find out more

News

US government agencies set to shut down

20/12/24

News

20/12/24

US government agencies set to shut down

Washington, 20 December (Argus) — US federal agencies would have to furlough millions of workers and curtail permitting and regulatory services if no agreement is reached by Friday at 11:59pm ET to extend funding for the government. US president-elect Donald Trump and his allies — including Tesla chief executive Elon Musk — on 18 December upended a spending deal US House of Representatives speaker Mike Johnson (R-Louisiana) had negotiated with Democratic lawmakers in the House and the Senate. Trump endorsed an alternative proposal that Johnson put together, but that measure failed in a 174-235 vote late on Thursday, with 38 Republicans and nearly every Democrat voting against it. Trump via social media today indicated he would not push for a new funding bill. "If there is going to be a shutdown of government, let it begin now, under the Biden Administration, not after January 20th, under 'TRUMP,'" he wrote. There was little to indicate as of Friday morning that Trump, Republican congressional leadership and lawmakers were negotiating in earnest to avert a shutdown. The House Republican conference is due to meet in the afternoon to weigh its next steps. President Joe Biden said he would support the first funding deal that Johnson negotiated with the Democratic lawmakers. "Republicans are doing the bidding of their billionaire benefactors at the expense of hardworking Americans," the White House said. Any agreement on funding the government will have to secure the approval of the House Republican leadership and all factions of the Republican majority in the House, who appear to be looking for cues from Trump and Musk on how to proceed. Any deal would then require the support of at least 60 House Democrats to clear the procedural barriers, before it reaches the Senate where the Democrats hold a majority. The same factors will be in play even if the shutdown extends into early 2025. The Republicans are set to take the majority in the Senate when new Congress meets on 3 January. But their House majority will be even slimmer, at 219-215, requiring cooperation of Democratic lawmakers and the Biden administration. What happens when the government shuts down? Some agencies are able to continue operations in the event of a funding lapse. Air travel is unlikely to face immediate interruptions because key federal workers are considered "essential," but some work on permits, agricultural and import data, and regulations could be curtailed. The US Federal Energy Regulatory Commission has funding to get through a "short-term" shutdown but could be affected by a longer shutdown, chairman Willie Phillips said. The US Department of Energy, which includes the Energy Information Administration and its critical energy data provision services, expects "no disruptions" if funding lapses for 1-5 days, according to its shutdown plan. The US Environmental Protection Agency would furlough about 90pc of its nearly 17,000 staff in the event of a shutdown, according to a plan it updated earlier this year. The Interior Department's shutdown contingency plan calls for the Bureau of Land Management (BLM) to furlough 4,900 out of its nearly 10,000 employees. BLM, which is responsible for permitting oil, gas and coal activities on the US federal land, would cease nearly all functions other than law enforcement and emergency response. Interior's Bureau of Safety and Environmental Enforcement, which oversees offshore leases, would continue permitting activities but would furlough 60pc of its staff after its funding lapses. The US Bureau of Ocean Energy Management will keep processing some oil and gas exploration plans with an on-call group of 40 exempted personnel, such as time-sensitive actions related to ongoing work. The shutdown also affects multiple other regulatory and permitting functions across other government agencies, including the Departments of Agriculture, Transportation and Treasury. By Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Investment funds cut net long positions on Ice TTF

20/12/24

News

20/12/24

Investment funds cut net long positions on Ice TTF

London, 20 December (Argus) — Investment funds have cut their TTF gas net long positions on the Intercontinental Exchange (Ice) by nearly 50TWh from their historic peak at the end of November, while commercial undertakings' positions have moved strongly in the opposite direction. Investment funds' net long position had climbed steadily from 202TWh in the week ending 18 October to an all-time high of nearly 294TWh by 29 November. But in the two weeks since that point, their net position has dropped again by 48TWh ( see graph ), leaving their 246TWh net long position at the smallest since 8 November, according to Ice's latest commitments of traders report. However, only around 30pc of the decrease in the net long position came from closing long positions, with the large majority coming from opening up more shorts. Total long contracts were cut to 445TWh on 13 December from 461TWh on 29 November, but short contracts jumped to 200TWh from 167TWh in the same period. Such a large trimming of the net long position contributed to falling prices over the period — the benchmark Argus TTF front-month price fell from €48.45/MWh at the start of the month to €41.10/MWh at the close on 13 December. The front-quarter, front-season and front-year contracts all fell by roughly the same amount, as the entire price curve shifted down. While investment funds reduced their net long position over these two weeks, commercial undertakings — predominantly utilities — moved in the opposite direction, with their net short position falling to 37TWh from 102TWh. This was driven entirely by opening up more long contracts, which jumped to 947TWh from 877TWh, while shorts increased by just 5TWh between 29 November and 13 December to 984TWh. Commercial undertakings' total open interest therefore soared to 1.93PWh by the end of last week, triple the volume of investment funds' total open interest. Investment funds have in the past two weeks bought "risk reduction" contracts — generally used for hedging purposes — for the first time since May 2021. This suggests that some investment funds hold physical positions that they want to hedge their exposure to, although the volumes are small at around 300GWh for both shorts and longs. While utilities' positions in the futures markets are mostly risk-reducing to offset the risk held in physical positions, investment funds' positions are typically not risk-reducing because they are bets on the direction of prices. That said, utilities and other commercial undertakings such as large industrial buyers have increasingly set up trading desks that compete with hedge funds to capitalise on price trends and volatility in recent years. Risk reduction contracts account for around 69pc of commercial undertakings' open interest, meaning the other 31pc of contracts — amounting to 600TWh — were more speculative in nature. This 600TWh of speculative total open interest is only just below the 645TWh held by investment funds. By Brendan A'Hearn ICE TTF net positions TWh Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Australia’s Cleanaway, LMS to produce landfill gas

20/12/24

News

20/12/24

Australia’s Cleanaway, LMS to produce landfill gas

Sydney, 20 December (Argus) — Australian waste management operator Cleanaway and bioenergy firm LMS Energy will partner on a 22MW landfill gas-fired power station at Cleanaway's Lucas Heights facility near the city of Sydney. Cleanaway, Australia's largest publicly listed waste management firm, will receive exclusive rights to landfill gas produced at Lucas Heights for 20 years, the company said on 20 December. LMS will invest A$46mn ($29mn) in new bioelectricity assets, including a 22MW generator. Tightening gas markets owing to underinvestment in new supply has led to speculation that more waste-to-energy plants could be brought on line in coming years, especially in the southern regions. Landfill gas projects receive Australian Carbon Credit Units (ACCUs) by avoiding methane releases, with the total ACCU quantity calculated after a default baseline of 30pc is deducted for projects beginning after 2015. A total of 42.6mn ACCUs were issued to landfill gas projects since the start of the ACCU scheme in 2011, 27pc of the total 155.7mn and the second-largest volume after human-induced regeneration (HIR) methods at 46.68mn. Canberra is reviewing ACCU issuance for these projects, and wants most projects to directly measure methane levels in captured landfill gas to avoid overestimation. Landfill gas operations which generate electricity from the captured gases can also receive large-scale generation certificates (LGCs). LMS has 70 projects currently registered at the Clean Energy Regulator (CER) and has received 24.57mn ACCUs since the start of the scheme. This is the largest volume for any single project proponent, just ahead of Australian environmental market investor GreenCollar's subsidiary Terra Carbon with 23.57mn units. Cleanaway received almost 1mn ACCUs from two projects and has four other projects that have yet to earn ACCUs. By Tom Major and Juan Weik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Trump backs new deal to avoid shutdown: Update

19/12/24

News

19/12/24

Trump backs new deal to avoid shutdown: Update

Adds updates throughout Washington, 19 December (Argus) — US president-elect Donald Trump is offering his support for a rewritten spending bill that would avoid a government shutdown but leave out a provision authorizing year-round 15pc ethanol gasoline (E15) sales. The bill — which Republicans rewrote today after Trump attacked an earlier bipartisan agreement — would avoid a government shutdown starting Saturday, deliver agricultural aid and provide disaster relief. Trump said the bill was a "very good deal" that would also include a two-year suspension of the "very unnecessary" ceiling on federal debt, until 30 January 2027. "All Republicans, and even the Democrats, should do what is best for our Country, and vote 'YES' for this Bill, TONIGHT!" Trump wrote in a social media post. Passing the bill would require support from Democrats, who are still reeling after Trump and his allies — including Tesla chief executive Elon Musk — upended a spending deal they had spent weeks negotiating with US House speaker Mike Johnson (R-Louisiana). Democrats have not yet said if they would vote against the new agreement. "We are prepared to move forward with the bipartisan agreement that we thought was negotiated in good faith with House Republicans," House minority leader Hakeem Jeffries (D-New York) said earlier today. That earlier deal would have kept the government funded through 14 March, in addition to providing a one-year extension to the farm bill, $100bn in disaster relief and $10bn in aid for farmers. The bill would also provide a waiver that would avoid a looming ban on summertime sales of E15 across much of the US. Ethanol industry officials said they would urge lawmakers to vote against any package without the E15 provision. "Pulling E15 out of the bill makes absolutely no sense and is an insult to America's farmers and renewable fuel producers," Renewable Fuels Association chief executive Geoff Cooper said. If no agreement is reached by Friday at 11:59pm ET, federal agencies would have to furlough millions of workers and curtail services, although some agencies are able to continue operations in the event of a short-term funding lapse. Air travel is unlikely to face immediate interruptions because key federal workers are considered "essential," but some work on permits, agricultural and import data, and regulations could be curtailed. The US Federal Energy Regulatory Commission has funding to get through a "short-term" shutdown but could be affected by a longer shutdown, chairman Willie Phillips said. The US Department of Energy expects "no disruptions" if funding lapses for 1-5 days, according to its shutdown plan. The US Environmental Protection Agency would furlough about 90pc of its nearly 17,000 staff in the event of a shutdown, according to a plan it updated earlier this year. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more