Baltic States to Set Up Single Market
The three prime ministers of Latvia, Latvia and Estonia have agreed to develop a single regional gas market with the wider markets’ merger being an ultimate goal.
“It is in line with Lithuania’s key objective – establishing a competitive and liquid gas market and achieving security of gas supplies. The single Baltic gas market will facilitate and secure all optimal access to the Klaipeda LNG terminal and other alternative sources of gas supply to every country in the region,” Lithuania's transmission system operator Amber Grid told NGW.
Amber Grid CEO Saulius Bilys said: “When this process is completed, gas supply across the region will be simpler and gas prices to the customers will be more affordable.”
The single Baltic gas market plan will provide local gas players a single system of gas entry and exit points, including a single virtual trading point, a regional gas market, and a single balancing area. So far the three states have acted independently of the other, including the pursuit of individual, publicly funded LNG import facilities for each, rather than pooling their modest gas demand.
If all goes well, a single regional gas market in the Baltics should become operational in 2020. When Balticconnector, the 7.2mn m³/d gas line between Estonia and Finland is in place, Finland is expected to join it.
Balticconnector route (credit: Elering)
As the endeavour requires investments into the existing gas infrastructure, Amber Grid is set to bolster the throughput capacity of the gas cable connecting Latvia and Lithuania. For that, a feasibility study detailing implementation parameters is scheduled for 2017. When done, the use of Latvia’s Incukalns underground gas storage facility will be eased not only for gas market players in Lithuania and Latvia, but those in Poland, too. Poland will be linked to it by a line to Lithuania, which Amber Grid and Gaz-System are now working on.
Gazprom operates a gas storage facility in the Russian exclave on the Baltic coast, Kaliningrad, which is not expected to become part of the single market.