Natural Gas Transmission System Operator
Competition between LNG and piped gas is beneficial for consumers of the region

As the Baltic market participants use a particularly favourable conjuncture of natural gas prices in Europe, according to the actual traffic data that is made publicly available by Amber Grid, natural gas flow to Latvia in the second week of June exceeded the flows of gas consumption in Lithuania and of transit from Russia to Kaliningrad Region through Lithuania.

Due to intense competition between gas supply sources, recently, all the Baltic States have been intensively using gas which is imported through Klaipėda LNG terminal. For this reason, the directions of gas flows are changing in the system.
During the second week of June, the average quantity of 56.5 gigawatt-hours (GWh) of natural gas per day was transported to Latvia and Estonia through Lithuania, the largest quantity of gas was imported through Klaipėda LNG terminal. It is almost three times more than the same time last year when the average quantity of 19.3 GWh of natural gas per day was transported to other Baltic States.
“Thanks to a convenient infrastructure, the market participants can buy and transport gas from different supply sources for a lower price not only for Lithuanian consumers but also for consumers in other Baltic States. Whereas the Baltic gas markets are showing increasingly better results of operation, the well-developed Lithuanian gas transmission system is used more efficiently”, says Saulius Bilys, CEO of Lithuanian natural gas transmission system operator Amber Grid.
According to the data of Amber Grid, natural gas transportation orders that were placed by the market participants show that a similar gas flow situation should remain throughout the summer season. During a warm season, gas flows towards Latvia increase due to seasonally lower prices and the possibility to store gas in Latvian Inčukalns Underground Gas Storage Facility. Also, as LNG competitiveness increases, Latvian and Estonian consumers take advantage of favourable gas prices. Consequently, gas more and more often is directed northward.
“Gas exchange that heretofore was mainly piped, now is being transferred to the LNG market. This shows that gas supply structure is changing. At the same time, we see a change in the behaviour of gas suppliers. Whereas the market conditions are changing pretty fast, the system users are switching from ordering long-term gas import capacities to short-term ones. This shows that entities operating in the gas business sector respond to the market situation, are free to change gas supply strategies, and are becoming more dynamic. This is likely to be positively reflected in consumer bills”, says S. Bilys.
The fact that in separate periods Lithuanian consumers see consumption of gas received through Klaipėda LNG terminal as increasingly attractive is demonstrated by natural gas supply data of May this year. These data suggest that the total quantity of 1.7 terawatt-hours (TWh) or 95% of natural gas imported to Lithuania was supplied through Klaipėda LNG terminal. This is one fifth more than in May last year when the total quantity of 1.4 TWh or 74% of the total quantity of injected natural gas was supplied to the system through the LNG terminal. The remaining part, specifically 0.09 TWh or 5% of natural gas in the last month of this spring was supplied from Belarus.
According to S. Bilys, Lithuania is becoming a crossroads of gas flows in the Baltic region. Today three countries – Lithuania, Latvia and Estonia use a well-developed gas transmission infrastructure and enjoy favourable trading conditions. From the beginning of the next year, Finland will join the infrastructure after the pipeline connection between Finland and Estonia Balticconnector will be constructed. A couple of years later, the way for gas connection with Western Europe through Poland will be opened up. The public procurement process approaches the end. After the end of the process and after signing the contract, the construction of the GIPL connection will start. At the beginning of June, Lithuanian and Latvian gas transmission system operators submitted a joint application for EU support to increase capacities of the gas pipeline that connects both countries. These works of the market integration will further increase the accessibility of gas infrastructure for consumers.


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