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    Latvia, Estonia confirm higher tariffs: press


Estonia and Latvia have made progress in recent weeks to launch new floating LNG terminals.

by: Callum Cyrus

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Natural Gas & LNG News, Europe, News By Country, Latvia, Lithuania

Latvia, Estonia confirm higher tariffs: press

Energy tariffs are rising in both Estonia and Latvia, in line with the trend seen across much of Europe, local media reported September 2.

Alda Ozola, president of Latvia's public utilities regulatory commission, predicts Latvia's seasonal heating price will average €140/MWh from October 1. He says tariffs could have been higher, praising Latvenergo's gas supply efforts as "relatively successful".

Natural gas accounts for roughly 88% of Latvian thermal energy costs, with gas tariffs ranging up to €225/MWh, according to Latvian newswire LETA.

Latvia's tariff rise relates to the wholesale price for to thermal power plants, TEC-1 and TEC-2, both run by national utility Latvenergo. LETA reports TEC-1's production cost for heating energy will be €53.49/MWh, while TEC-2 will cost €54.41/MWh.

Both estimates factor in gas prices but also a 50% supply reduction and "unforeseen costs" from the 2021 heating season, LETA said.  Gazprom temporarily shut off Latvenergo's gas supply for six days in late July-early August,  accusing the Latvian company of violating the terms of its supply contract. 

While the supply was restored on August 5, Latvia hopes to cease all Russian gas imports by 2022-end.

On August 30,  Latvian prime minister Krisjanis Karins announced national interest status was awarded to a planned LNG import terminal in the port town Skulte.The project, backed by Latvian energy company Virsi, could be completed within 16 months.

In Estonia, newswire ERR reports September tariffs for households will reach €2.65/m3 (€385/MWh), up five-fold from €0.48/m3 in January 2021, before rising to €4.10/m3 in October.

European wholesale gas prices have eased in recent days, as traders account for pan-European efforts to fill gas storages and limit energy usage.

However Eesti Gaas management board chair Margus Kaasik warned the downward price trajectory could reverse as Gazprom clarifies plans for the winter season. "There is currently a tinge of optimism in the air as the price has been dropping for a few days, but it is unclear whether this trend will continue," Kaasik said.

Eesti Gas was forced to withdraw fixed price deals at its trading unit in May, amid surging wholesale rates. Like Latvia, Estonia's government aims to halt Russian gas imports by the end of this year.

Estonia possesses domestic oil shale that meets around 75% of its energy supply, and the country also has access to regasified LNG imports via Lithuania's Klaipeda terminal.

In addition, work is continuing on Estonia's first floating LNG import facility, to be hosted at Paldiski, with the first development phase completed in recent days. Finland is expected to share Paldiski LNG's floating storage and regasification unit.

In July Eesti Gas bought 2 TWh for gas storage, paying the forecast market rate for October-November.