EU Energy Security: Balticonnector to Link Finland’s and Estonia’s Gas Markets

Written by | Thursday, August 11th, 2016

The European Commission has designated €187.5 million for constructing a gas pipeline, the Balticconnector, between Finland and Estonia, after it allocated € 5,4 million for studies necessary to launch construction works in December last year. The EU’s financial support now accounts for about two thirds of the necessary funding, which is the maximum allowed proportion. The Balticconnector will be the first gas pipeline to connect Estonia and Finland and the project is important in that it will significantly increase energy security in the eastern Baltic Sea region.

It will be able to transport gas in both directions and – together with the gas interconnector Poland-Lithuania – will help finalize the Baltic Gas Ring and end the isolation of Finnish gas market. The pipeline will be 144 km long including an 80-km offshore section and it is expected to be operational by the end of 2019. “What the Commission has started with the Poland-Lithuania pipeline (GIPL) we are now pursuing with the support to Balticconnector – promoting a chain of projects that will end the gas isolation of North-Eastern Europe and develop the Baltic regional energy market,” European Climate and Energy Commissioner Miguel Arias Cañete said.

Finland is still completely dependent on gas flows from a single supplier and, until recently, the three Baltic States also had to rely on gas imports from a single gas source. When the Balticonnector is completed, it will allow, together with the gas link between Poland and Lithuania, Finland and the Baltic States to diversify their gas sources and routes and thus help to effectively deal with possible supply shortages. The Balticonnect will also help integrate the region into the EU’s internal energy market. The pipeline will be built by Finnish Baltic Connector Oy and Estonian Elering AS. The former was established by the Finnish government as a project company.

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