Letter of Intent for Natural Gas Deliveries to the Turku Economic Zone 

On Monday 7 January Gasum Oy signed letters of intent with Neste Oil Oyj and Turun Seudun Maakaasu ja Energiantuotanto Oy for the delivery of natural gas. 

The letters of intent stipulate the binding time schedules for the contracting parties’ other activities that will facilitate the rendering of their final investment decisions. A new natural gas pipeline will be constructed if Neste Oil decides to build a new production unit for its Naantali refinery and Turun Seudun Maakaasu ja Energiantuotanto decides to build a new combined heat and power plant. The total consumption of natural gas is expected to exceed 450 million cubic meters annually. 

If the natural gas customers’ investments are confirmed by the end of October 2008, Gasum will be able to begin selling natural gas to the Turku economic zone in 2011. If the investment decisions are delayed, the sales of natural gas to Turku and Naantali will start in 2012 at the earliest. 

Gasum’s procurement agreement with Gazprom Export will facilitate the delivery of the required natural gas quantities to the Turku economic zone. Gasum estimates that about a year is needed to finalise the design; actual construction will take about 2 years. The pipeline’s building costs will be confirmed when the design is complete; Gasum’s current estimate is EUR 150 million. 

The letters of intent now signed concern the Turku economic zone’s two most important natural gas customers; in practice they will determine whether or not a new natural gas pipeline is built. If the project is implemented, it will also open up a wide range of opportunities to utilise natural gas in the Turku area and other municipalities situated along the pipeline. In the area served by the existing network, natural gas is used for the generation of power, heat and steam, in district heating as well as in industrial plants and greenhouses. The Turku area also offers many possibilities for utilising natural gas-powered vehicles in bus traffic, taxis, distribution traffic, or even waste transport. 

The length of the new natural gas pipeline is approximately 200 kilometres, and it passes through 20 municipalities. Gasum has already clarified the environmental impacts of the pipeline’s construction and obtained the necessary land acquisition permit from the Council of State. An approximately one kilometre-long pipeline not included in the original alignment planning is also required for the production facility currently being designed for Neste’s Naantali refinery. 

In land expropriation permits, the pipeline’s alignment is already fairly well defined, but may still be modified as a result of the site investigations. These are already completed at the alignment’s initial sections (Mäntsälä, Hyvinkää, Hausjärvi, Riihimäki). The site investigations will continue in the spring of 2008 at the alignment’s end sections (Loppi, Tammela, Jokioinen, Somero, Ypäjä, Koski Tl, Pöytyä, Marttila, Tarvasjoki, Aura, Lieto, Rusko, Kaarina, Turku, Raisio and Naantali).