UPDATE 2-Finland leases floating LNG terminal for 10 years to break free from Russian gas

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HELSINKI, May 20 (Reuters) - Finland has agreed a 10-year charter for a floating storage and regasification (FSRU) vessel with U.S. based Excelerate Energy to help replace Russian gas supply, finance minister Annika Saarikko said on Friday.

"The LNG terminal will make it possible for us to break free from Russian gas," Saarikko said in a statement.

The announcement coincided with Finland's state-owned energy group Gasum saying Russia's Gazprom Export had informed it that natural gas supplies from Russia to Finland would be cut on Saturday 21 May at 04.00 GMT.

Last Friday, Finland's emergency preparedness committee said it was ready to cope in the event that Russia cuts off its supply of natural gas.

Finland and Estonia announced in April their intention to jointly charter a floating terminal for importing liquefied natural gas (LNG), a globally traded commodity, to help replace current deliveries of Russian gas.

Saarikko said the aspiration was to have the vessel, which will be located on the Southern coast of Finland, operational in the fourth quarter of this year.

"The total cost of the LNG terminal vessel project with the 10-year lease is estimated to be at 460 million euros ($487 million), in addition to which there are separate costs associated with the volume of use," Gasgrid Finland said, adding it was in talks with Estonian Elering on their participation.

The floating terminal will be managed by gas system operators Gasgrid Finland and Elering, with the Finnish partner to bear 80% of the rental costs, they said previously.

The vessel has a volume corresponding to about 68,000 tonnes of LNG when full, equally about 1,050 GWh of energy and it will be loaded with LNG around two to three times a month, Gasgrid Finland said.

"With more than 5 billion cubic metres a year in regasification capacity, Exemplar (the vessel) can easily cover Finland and Estonia's combined gas consumption and have much more left over," Excelerate's Chief Executive Steven Kobos told reporters.

The company saw its share climb 3.4% $25 in the U.S. premarket on the news.

"The LNG terminal ship will play a major role in securing gas supplies for Finland's industry," Finland's minister of economic affairs Mika Lintila said in a statement.

($1 = 0.9442 euros) (Reporting by Anne Kauranen and Essi Lehto; editing by Jason Neely, Philippa Fletcher and Louise Heavens)