Finland gets backing for LNG development

BRUSSELS, March 18 (UPI) -- The European Commission said Friday it supported Finland's strategy to invest in a small-scale liquefied natural gas terminal as an energy security option.

The commission said it supported the government's plans to grant $31.5 million to build an LNG terminal at the Hamina port on the southern Finnish coast. By ending energy isolation for Baltic states, the European body said the strategy is in line with regional efforts to improve energy security.

"The Hamina LNG terminal is one of several planned in Finland," Margrethe Vestager, the European commissioner in charge of competition, said in a statement. "These small scale LNG terminals will provide a new source of cleaner fuel for the maritime industry and diversify Finland's gas supply sources."

There are no LNG terminals in Finland. With no large-scale commercial natural gas production of its own, the country relies entirely on Russia for its gas needs. The Finnish government aims to diversify its energy sector with small-scale LNG terminals to meet maritime and domestic demand for natural gas.

U.S. lawmakers have backed European gas diversification schemes, expressing concerns over Russia's grip on the regional energy sector. LNG supporters in the United States have said exports from domestic shale gas basins could eat into Russia's share of the European market.

Finnish company Haminan Energia and Alexela Asset Management in 2015 signed an agreement to develop the LNG terminal at Hamina. The Hamina LNG terminal is slated for completion in 2018.

The European Commission in 2015 backed similar funding for an LNG terminal slated for Finland's western coast.