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Finland's gas utility Gasum has dropped plans to construct an LNG import terminal and gas pipeline in the south of the country because the project was deemed to be "not commercially viable".

In a statement, the company said: "On the basis of the studies Gasum has conducted the Finngulf and Balticconnector projects are not regarded as commercially viable and there is not sufficient demand for them in the Finnish market. Therefore Gasum will give up the implementation of both projects."

The company, which is owned by the Finnish government (75%) and Gazprom (25%), explained that the future outlook of the Finnish gas market had changed since plans to carry out the project were initiated in 2008. "The competitiveness of gas has deteriorated and gas consumption has decreased [since 2008]. In Southern Finland in the area covered by the gas pipeline network, investments of this scale would further weaken the competitiveness of gas. The extensive studies conducted indicate that the Finngulf and Balticconnector projects are not commercially viable. Therefore Gasum will give up the implementation of both projects," Gasum said.

Despite pulling out of the LNG import terminal project, Gasum remains active in the development of the Finnish gas market. Its subsidiary Skangas is building an LNG terminal in Pori, Finland, and is also a co-owner of an LNG terminal under construction in Tornio, Finland.

"The Pori and Tornio terminal projects will serve the growing needs of the market outside the gas pipeline network in industry, shipping and heavy-duty road transport," Gasum said.

Johanna Lamminen, Gasum's CEO, remarked: "Gasum is investing constantly in the development of the Finnish gas infrastructure. Our key objectives are to ensure our customers' access to clean and competitive fuels and at the same time develop the Finnish biogas market and Nordic LNG market."