Three potential investors to build LNG terminal in Latvia

The Ministry of Economics (EM) has received three applications from potential investors who are prepared to build an LNG terminal in Latvia, Latvian Radio reported on May 31.

Of the three potential investors willing to build an LNG terminal, only one, fuel trader AS “Virši-A”, has made it public. Virši-A has signed a contract for the purchase of 20% shares of AS “Skulte LNG Terminal”, which is planned to develop the LNG terminal at the port of Skulte.

Gunars Valdmanis, executive director of the Latvian association of electrical engineers and energy construction (LEEA), said that a very large number of applicants would not be expected to apply for the creation of the LNG terminal.

"There are not many companies in Latvia that would largely correspond to that business profile. Therefore, there is no reason to expect hundreds and dozens of applicants, but the big players, companies already involved in the energy market, are the most likely candidates. The extent of the interest, I think, is not a very decisive issue for the viability or prospects of the project, since for a large part of the business it is a completely new direction to develop this type of infrastructure,” Valdmanis said.

He said that it was possible to build LNG terminals by investing private capital without public co-financing, but the final decision on this has not yet been made.

“The negotiations are likely to set out other ways in which the country can guarantee some stability and sustainability for this facility, as it is clear that it is part of a security of supply infrastructure that is not only commercial but also, to some extent, a non-commercial security function,” said Valdmanis.

He estimated that the LNG terminal could cost around €100 million, but the costs of the EM project have yet to be made public.

“We need a strategic decision that we need such a gas terminal,” said Aigars Laizāns, Professor of the Energy Institute of Latvian University of Life Sciences and Technology.

"I am really worried and afraid that with long discussions and lowest-price seeking will come to a situation in the autumn that there is no terminal and no gas. Yes, we haven't built any gas-related facilities since the Soviets. [..]At the moment, the main decision is to say that we need to do this 'tomorrow', and whoever will do it sooner [..] should be the basis for this decision. Not – savings, cheaper, five years later," Laizāns said.

EM has previously indicated that talks have been opened with several potential investors of the LNG terminal, and according to the entrepreneurs' estimates, the LNG terminal in Latvia could be built next year or next year.

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