If the developer of Skulte liquefied natural gas terminal (LNG) or its strategic investor present inadequate guarantees to the state, it is possible the state may organise construction of this terminal on its own, said Latvia’s PM Krišjānis Kariņš in an interview to LTV programme Rīta panorāma on Wednesday, the 8th February.
He said he has read the recently received letter from Skulte LNG Terminal JSC. He said does not mention any specific numbers or guarantees the developer or strategic investor would like to receive from the state if the projects is implemented. Kariņš said he is confused
«why someone offers to do something and is unable to make it clear what they want».
The PM promised to prevent a situation in which the investor could request impossible promises and guarantees from the state. For example, the state will never agree to guarantee profits from the terminal’s construction project. «If they decide to look for guaranteed profits or whatnot, this is completely completely excluded,» said Kariņš.
The head of the government does not exclude the possibility Latvia may take on SDG’s construction on its own if it becomes the most economically sound solution. The Ministry of Climate and Energy is currently hard at work evaluating all possible options to have this terminal constructed.
As previously reported, the decision regarding progress with Skulte LNG terminal project could come in February, once the offer from Skulte LNG Terminal has been reviewed, said Minister of Climate and Energy Raimonds Čudars in a previous interview. He said the situation in the gas market changes dynamically, and the network for gas transporting is in the middle of some changes.
«Skulte terminal is like an anti-aid defence system. We are purchasing it for a lot of money, but we don’t know if it is functional,» explained Čudars, adding that potential developers have sent a with a proposal for future cooperation with «certain guarantees», which the government will review and decide if they are acceptable.
As previously reported, Skulte LNG Terminal has found a strategic investor. On the 13th of January the company submitted to the government a proposal for desired forms of cooperation. Proposals provide administrative solutions that are intended to improve the terminal’s competitiveness, as well as commercial contracts for the use of future output. There could be third-party exclusions that permit signing contracts for parts of output, as well as other forms of support based on European practices, as noted by the management of Skulte LNG Terminal.
The company’s director general Renārs Miķelsons did not reveal the investor. He only said it is a large company that has terminals elsewhere in the world. He also said the company’s shares are not quoted on the exchange. This company, he said, is prepared to reveal its name once a reaction from the government comes.
Also read: Natural gas market still requires caution, Latvenergo warns