Swedish gas transmission company Swedegas and Netherlands-headquartered terminal developer Vopak signed a preliminary agreement on Wednesday to explore constructing an LNG terminal in the port of Gothenburg.

Swedegas, which owns and operates the gas grid in southwestern Sweden, will partner Vopak have launched a technical feasibility study with the aim of taking of a final investment decision on the project early next year, a Swedegas spokesperson said.

Swedegas is hoping to start operations at the terminal in 2015, which would have an initial regasification capacity of around 500 million cubic metres/year, although this could be expanded depending on future demand, according to the Swedish company.

Currently, Sweden imports all its natural gas from Denmark via a pipeline that links the two countries. The available import capacity of the Swedish transmission system is 30TWh/year (around 2.80 billion cubic metres/year) of natural gas. Last year Swedegas transported energy equivalent to 15TWh in the system, and the company is keen to develop the LNG terminal as a means to tap into the growing market for LNG as a shipping fuel but also to supply industrial and commercial end-users that are not connected to the grid.

Sweden already has a small-scale LNG terminal opened by industrial gas manufacturer AGA in May 2011 in Nynäshamn in the east of the country. A further terminal is being developed by regional small-scale LNG supplier Skangass on the country's west coast at Lysekil.

Unlike the terminal at Lysekil, the prospective LNG terminal at Gothenburg will be open to all companies that are interested in supplying the Swedish gas market, Swedegas said.

"The one in Lyeskil is a different business approach," the spokesperson said. "They [Skangass] own the tank, operate and supply the LNG to one major customer. We would look to invest in an open-access terminal where commercial actors can buy capacity in the tank." KA

Copyright 2012 Heren Energy Ltd. All Rights Reserved.

(Originally published June 20, 2012, in European Spot Gas Markets.)