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LNG Gorskaya Overseas Ou plans bunkering centers in Estonia, Germany

LNG Gorskaya Overseas Ou, the Estonian arm of Russia's LNG Gorskaya, is planning to build two LNG bunkering centers at the Montu port in Estonia and port of Lubeck in Germany, the company said in an e-mailed statement Wednesday.

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This comes at a time when LNG is gaining increased traction due to stricter environmental regulations.

Most LNG has no detectable sulfur, and so emissions are considerably lower than when using other marine fuels.

Two bunkering vessels are being converted in a shipyard in Poland, marking the beginning of construction of the bunkering centers, the company said. The completion date would depend on the number of partners or ports joining the project, it said.



The cost of a storage facility with a capacity of 5,000 cubic meters including tanks is estimated at Eur25 million ($26.28 million) while the the cost of one LNG bunkering vessel is expected to be around Eur10 million-12 million, the company said.

Investment will be required on coastal infrastructure too, it said, adding that the funding for each port would be different.

The project will likely be financed by the various parties using own and external funds, including those under programs such as The Connecting Europe Facility for Transport, or CEF-T, aimed at developing EU's transport infrastructure further, the company said.

Bunkering vessels would be capable of supplying ships at Estonian, German, Swedish and Latvian ports on demand, and this would be viable due to their proximity to Montu or Lubeck, it said.

LNG Gorskaya is currently developing a project, under which LNG will be produced on a non-self-propelled barge. It is designed to process 1.968 billion cubic meters of natural gas a year, which corresponds to the production of 1.26 million mt of LNG, the company said on its website. LNG Gorskaya plans to startup the project and also start selling LNG by December 2017.

In July, LNG Gorskaya said that it had been given a permit by the Federal Marine and River Transport Agency, Rosmorrechflot, to invest in the construction of an LNG port in Saint-Petersburg.

--Surabhi Sahu, surabhi.sahu@spglobal.com
--Edited by E Shailaja Nair, shailaja.nair@spglobal.com