Evaluating the information on the current situation provided by the Ministry of Economics (EM) as the institution responsible for security of gas supply, the government announced an early warning in the natural gas supply sector on Wednesday, March 9, according to the Latvian gas transmission and storage system operator Conexus Baltic Grid.
Līga Rozentāle, Deputy Director of the Energy Market and Infrastructure Department of the Ministry of Economics, explained to LETA that early warning does not mean a crisis, but is a forerunner to prevent a potential crisis situation in the future.
Rozentāle explained that the announcement of the early warning means that Conexus Baltic Grid will prioritize natural gas flows, giving priority to gas flows from the Klaipėda liquefied natural gas (LNG) terminal via the Lithuania-Latvia interconnection and gas flows through the Lithuania-Poland natural gas interconnection.
Accordingly, preference will be given to injecting gas into the Inčukalns Underground Gas Storage Facility (UGS) from gas coming from these directions, rather than gas being pumped through a pipeline from Russia, Rozentāle explained.
On March 15, Conexus Baltic Grid plans to publish the procedure for allocating natural gas transmission system capacity and Inčukalns UGS injection capacity, which provides the largest possible amount of injection of gas transmitted from Klaipeda LNG terminal and Lithuanian-Polish natural gas interconnection system to Inčukalns UGS, as well as , who have already reserved the capacity of the Inčukalns UGS for the storage cycle of 2022/2023 by March 9, have the opportunity to renounce the reserved capacity.
Conexus Baltic Grid will coordinate with the Member States directly involved in order to prioritize gas flows.
It has already been reported that recent events have turned the horizon towards short-term solutions and the security aspect, and the MoE is currently working on it, Ilze Indriksone (NA), Parliamentary Secretary of the Ministry, said at a meeting of the Saeima Public Expenditure and Audit Commission on Tuesday.
On behalf of the government, Latvenergo has already purchased two LNG vessels, which will provide Latvenergo with the necessary gas to avoid endangering the heat supply in Riga in the event of problems with supplies from Russia. In addition, EM is considering the purchase of another LNG carrier.
“We are thinking of buying another gas-powered vessel to ensure that Latvenergo can possibly take the place of Latvenergo as a gas supplier to households in a critical situation. Then we can solve this problem simply, but certainly not cheaply,” said Indriksone.
At the same time, she stressed that there is still no risk that Russia could cut off gas supplies.
Aigars Kalvītis, Chairman of the Board of Latvijas gāze, pointed out to LETA that Latvijas gāze has sufficient natural gas reserves in the Inčukalns underground gas storage facility to continue to supply natural gas to households and market customers in accordance with the concluded agreements.
It has already been reported that the government decided at an extraordinary meeting on February 24 that Latvenergo will purchase additional strategic gas reserves. Prime Minister Krišjānis Kariņš (JV) emphasized that the state-owned Inčukalns underground gas storage facility has sufficient reserves, but the government’s decision instructs Latvenergo to replenish these reserves so that the state is fully secured.
To replenish the state gas reserves, Latvenergo has purchased approximately two terawatt hours (TWh) of gas from Norway, the USA and Qatar. The concluded agreements envisage gas supply to Klaipeda LNG terminal and pumping into Inčukalns underground gas storage in April and May.
The liquefied gas gasification capacity of Klaipeda LNG terminal is 40 TWh per season, while the seasonal consumption in Lithuania is 20 TWh, in Latvia – 10 TWh, but in Estonia – five TWh.
Kalvitis has pointed out that the world cannot function at current gas prices, so if there is no emergency, the market should calm down.
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