New Sources of Natural Gas for Finland: The Balticconnector Pipeline and LNG Imports

Abstract

<p> This chapter examines the impact of new sources of natural gas on the Finnish energy sector and the diversification of gas supply, focusing on the Balticconnector pipeline between Estonia and Finland and LNG infrastructure development. Both LNG terminals and Balticconnector have been advocated to contribute to diversified gas supply in Finland, thus enhancing energy security. Although LNG terminals have allowed the delivery of gas outside the reach of the national gas grid, due to their small capacity, currently only pipeline gas has strategic significance for Finland. Balticconnector has enabled the integration of the gas markets of Finland and the Baltic States, which is a step towards the creation of the EU-wide internal gas market. However, the true diversification of the sources of gas supply in Finland necessitates connecting the Finnish-Baltic and Central European gas transmission networks, particularly by completing the GIPL pipeline. Natural gas is increasingly seen as an interim solution in the transition towards carbon neutrality that the EU strives for by 2050. This calls into question the long-term viability of the expensive investments in gas infrastructure. On the other hand, the benefit of gas infrastructure is that it can be utilised in the transmission of biogas and retrofitted to the use of hydrogen, thus enabling the transition to more climate-friendly energy sources in the future. <br></p>