Friday, December 8, 2023

After offshore gas pipe suspected sabotage, Finland switches to LNG

One year after Nord Stream attack, Balticconnector damage raises energy infrastructure security concerns

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Finland has switched to liquified natural gas supplies to cover the country’s needs following a decision on October 8 to shut down the Balticconnector offshore gas pipeline after Gasgrid Finland Oy and the Estonian gas transmission system operator Elering AS noticed an unusual drop in pressure in the pipeline that runs between the countries.

Damage to the Balticconnector pipeline and telecommunications cable was confirmed on October 10. As the investigation continues, Finnish Navy investigators reportedly said on October 24 they believed the damage to the Balticconnector was caused by the anchor of the Hong Kong-flagged Chinese-owned cargo vessel Newnew Polar Bear.

Finnish investigators have reportedly recovered a large ship’s anchor from near the spot where the Balticconnector pipeline was extensively damaged and are seeking to establish whether it came from the Chinese container vessel. They reportedly told reporters in Helsinki that the container ship was missing a front anchor.

Whether the pipeline damage was intentional, unintentional, or caused by “bad seafaring” is subject of the next phase in the probe, AP quoted officials as saying.

The state of the Finnish gas system is stable, and the supply of gas is secured via the Inkoo LNG floating terminal, state-owned transmission system operator Gasgrid Finland said in a statement. The terminal has the capacity and the ability to deliver the gas Finland needs, including in the coming winter, even though gas consumption is typically higher in winter seasons, it added.

Katja Yafimava, a senior research fellow at the Oxford Institute for Energy Studies, told NE Global on October 11 the EU-backed Balticconnector pipeline gave Finland an additional supply option by enabling the country to receive gas from the Latvian storage via Estonia.

“Without the Balticconnector, Finland’s gas security will depend exclusively on its ability to secure and pay for LNG cargoes only as it had terminated its gas contract with (Russian gas monopoly) Gazprom, which provided another option. It should be able to do so but at elevated prices,” she said.

Gas accounts for 5 percent of Finland’s energy supply. Gasgrid said market players have been instructed to ensure the gas supply they need by ordering it to Inkoo LNG floating terminal or the Hamina LNG terminal, so that the continuity of the gas supply is secured in the coming winter season.

“We have now an LNG terminal which started its operation at the beginning of the year, thus, there should not be any problem with gas supplies,” P2X Solutions Founder and CEO Herkko Plit told NE Global on October 11. Previously, Plit has served as the CEO of Baltic Connector Oy before the company became inactive and its activities were transferred into Gasgrid.

P2X Solutions Oy is a forerunner of hydrogen in Finland. Asked if the Baltic Connector can transfer hydrogen in the future, Plit said the pipeline “is not 100 percent equipped to distribute hydrogen but can be retrofitted into it”.

Gasgrid Finland confirmed on October 10 the suspected damage to the Balticconnector. Despite the findings, Gasgrid said the company continues the inspection operation in cooperation with Elering to cover other sections of the offshore pipeline. “The goal of the ongoing inspection operation is to get an accurate understanding of the condition of the entire offshore pipeline, after which planning for more detailed repair measures and their schedule can be started,” Gasgrid said.

Repairs could take months

“Based on preliminary expert assessments, it can be assumed that the planning of the repair work, the mobilization of the necessary underwater equipment and the actual repair measures, including the inspection of the repaired pipe section and commissioning, will last at least five months. Therefore, the earliest possible commissioning date of the Balticconnector pipeline would be at the beginning of April 2024,” Gasgrid said.

Finland tightens energy infrastructure security

NATO Secretary General Jens Stoltenberg reportedly said NATO was sharing its information over the damage and stands ready to support the allies concerned. Finland joined the military alliance in April, while Estonia has been a member since 2004. “The important thing now is to establish what happened and how this could happen,” Reuters quoted Stoltenberg as telling reporters in Brussels ahead of a meeting of the military alliance, adding, “If it is proven to be a deliberate attack on NATO-critical infrastructure, then this will be, of course, serious, but it will also be met by a united and determined response from NATO.”

On October 13, Finland reportedly tightened access to the Inkoo LNG port as part of efforts in the wider region to intensify security at energy installations.

Yafimava told NE Global it’s difficult to know which additional measures could be adopted as several European countries had already strengthened their security measures in respect of gas production and transportation infrastructure in the aftermath of Nord Stream explosions.

“It is important to determine who caused damage to the Balticconnector and whether it happened by accident or by design. If it happened by accident, for example, a loose anchor dragging on seabed during a storm could hit the pipeline and the cable then not much could be done as such things sometimes happen,” Yafimava said on October 11. “But if it happened by design, then one would need to understand the motivation behind it and act accordingly,” she added.

The Balticconnector, which can be used to pump gas in both directions, started commercial operations on January 1, 2020. It was planned as an EU Project of Common Interest in an effort to increase interconnectivity in Europe, boosting energy security. The pipeline links Inga, also known as Inkoo, in Finland and Paldiski in Estonia, with its subsea section running 77 kilometers across the Gulf of Finland. The eastern parts of the Gulf of Finland belong to Russia, and some of Russia’s most important oil harbors are located farthest in, near St Petersburg.

The fact that Nord Stream investigation has still not concluded, one year after the blasts, may have emboldened whoever damaged the Baltic Connector – if indeed it was done on purpose, the Oxford energy expert said, adding, “This is because attributing the blame for one attack normally acts as a deterrent against a repeated similar attack.”

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Co-founder / Director of Energy & Climate Policy and Security at NE Global Media


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