OREANDA-NEWS. In the presence of the Finnish Economic Affairs Minister Olli Rehn and EU Climate Action and Energy  Commissioner Miguel Arias Ca?ete, a grant agreement of € 5,4 million was signed for studies necessary to launch construction works of the Balticconnector gas pipeline.

The Balticconnector will be the first gas pipeline to connect Estonia and Finland and will significantly increase energy security in the eastern Baltic Sea region. It will be able to transport gas in both directions and – together with the gas interconnector Poland-Lithuania – will help finalise the Baltic Gas Ring and end the isolation of Finnish gas market.

EU Commissioner for Climate Action and Energy Miguel Arias Ca?ete said: "Today's signature is a result of close regional cooperation and a proof of true commitment on all sides to end energy isolation. It marks an important first step for connecting the gas markets of the Eastern Baltic Sea region with the rest of the EU gas market. Building missing infrastructure links which is a prerequisite for a resilient, competitive and sustainable EU energy market, is a priority for the Energy Union."

Energy security and security of gas supplies are at the cornerstone of the Energy Union. Finland is still fully dependent on gas flows from a single supplier and, until recently, the three Baltic States also had to rely on gas imports from a single gas source. Once completed, the BalticConnector and the gas link between Poland and Lithuania (GIPL) will allow Finland and the Baltic States to diversify their gas sources and routes and thus help to effectively deal with possible supply shortages in the future. It will also help integrating the entire region into the EU's internal energy market.

The grant agreement signed today is an amendment to an earlier grant agreement for the same project signed in May 2015 to transfer the grant from Gasum Oy to the new Finnish project promoter, a newly established state-owned company, Baltic Connector Oy.

The BalticConnector has been a European project of common interest since 2013. The pipeline will consist of three sections – the Finnish onshore section (22 km), the offshore section (81 km) and the Estonian onshore section (47 km). The capacity of the pipeline will be 7.2 million cubic metres per day. The total cost of the project is foreseen to be €250 million. The pipeline is expected to be operational by 2020.