Estonia, Finland sign accord on building joint LNG terminals
* Formalises plan to build 2 LNG terminals and gulf pipeline
* Aims to submit project to regulators and EU by end-May
TALLINN Feb 28 (Reuters) - Estonia and Finland signed an agreement on Friday on building two new liquefied natural gas (LNG) terminals on either side of the Gulf of Finland and a pipeline connecting the two countries.
The countries have competed for more than a year over a project to build a new liquefied natural gas (LNG) terminal and the Estonian Economy Minister Juhan Parts made the compromise proposal in January this year.
"The intent of the signed Memorandum of Understanding is for cooperation between the Estonian and Finnish LNG terminal developers to build liquefied natural gas terminals on both sides of the Gulf of Finland," the Estonian economy ministry said in a statement.
The ministry added that by the end of May the project developers, Finland's Gasum and Estonia's Paldiski terminal developer, must present the joint project's technical and economic details to their respective countries' regulators and the European Commission.
Analysts say the region's gas demand only warrants one LNG import terminal, in terms of construction costs and gas import prices.
A single LNG terminal is estimated to cost around 500 million euros ($690.58 million) and provides an alternative to gas supplies from Russia. A pipeline that would allow Finland and Estonia to share imports would cost some 100 million euros.
The European Union could fund up to 40 percent of a regional terminal provided it serves the interests of more than one country, and there are several Baltic states vying for funds.
Finland and the three Baltic states of Estonia, Latvia and Lithuania consume about 10 billion cubic metres of gas per year, all currently supplied by Russia's Gazprom.
($1 = 0.7240 euros) (Reporting by David Mardiste, editing by David Evans)
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