An EU-backed project to build the first gas pipeline connecting Finland and Estonia moved closer on October 21 with the signing of a €187 million investment in the Balticconnector.

Anna Bulakh, Research Fellow, ICDS, International Centre for Defence and Security in Estonia, told New Europe by phone on October 21 that “it’s really important to have this pipeline because it is already bringing incentives for alternatives to appear here because it creates an integrated market and it creates a bigger demand”.

European Commission President Jean-Claude Juncker, Estonia’s Prime Minister Taavi Rõivas and Finland’s Prime Minister Juha Sipilä witnessed the signing of the agreement for the Balticconnector, which aims to end the energy isolation of EU member states by reducing their reliance on one supplier.

“At this point, in this region, as it is pretty isolated in gas infrastructure – not electricity but in gas infrastructure – the alternatives are really, really limited,” Bulakh told New Europe, adding that the only alternative to Russian gas is the Klaipėda liquefied natural gas (LNG) terminal in Lithuania.

“At the moment Balticconnector, I mean it’s an important project to lay out the infrastructure to basically to a least integrate all these isolated islands in infrastructure. But the really important second step is actually to connect Lithuania and Poland, finally to connect to Central European infrastructure network because at the moment it is too isolated,” Bulakh explained.

“There is no connection still to the Central European pipeline network that is why, for example, Nord Stream does not affect that much the supplies here,” she said.

The European Commission noted that when the gas starts flowing by 2020, Balticconnector would unite the Eastern Baltic Sea region with the rest of the EU energy market.

“Today’s signature shows that the European Union delivers and unites, Juncker said, who has pushed for close cooperation between EU Member States and European solidarity. “We are doing more than linking gas systems of two countries. We are bringing people and Member States in the region closer together by building a pipeline that unites European countries,” the European Commission President added.

As part of the Energy Union spearheaded by European Commission’s Vice-President Maros Šefčovič, the EU “is building missing energy links, uniting markets, improving security of supply and ending the energy isolation of Member States,” Juncker said.

The Estonian premier said the Balticconnector signifies a key development for Nordic-Baltic energy market integration, for the region’s security and diversity of supply and for consumer benefit. Regional co-operation and EU’s contribution allows for a change from entirely closed to one of the most diversified and open regional energy markets in the Union with further prospects in upcoming years.

Finland, even though it enjoys good business ties with Russia, sees the Balticconnector as a project that would help unify the EU energy market.

The EU Energy Union aims to ensure access of each EU member state to at least three different sources of natural gas.

“Balticconnector is an important milestone in helping to complete EU wide energy market and improving the security of supply in Baltic Sea region,” the Finnish premier said.

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