Eesti Energia expects LNG consumption in Baltics to grow ({{commentsTotal}})

The floating LNG terminal Independence arriving in the port of Klaipėda.
The floating LNG terminal Independence arriving in the port of Klaipėda. Source: (AFP/Scanpix)

Due to the convergence of a number of influencing factors, liquefied natural gas' (LNG) share of the Baltic gas market is likely to grow, said Aivar Tihane, head of Eesti Energia's gas sales, at a news conference on Friday.

According to Tihane, with Latvia's natural gas market opened for competition and a discount obtained by Lithuania from Russian gas giant Gazprom set to expire, LNG's share of the Baltic gas market is likely to grow and consumption of gas supplied by pipeline likely to decline.

"LNG consumption will continue to grow — that's very likely," he said at a news conference with Latvian, Lithuanian and Polish reporters in Tallinn.

Tihane would not disclose whether Eesti Energia had concluded any LNG purchase contracts, but he said that the company was looking to buy LNG via the Klaipėda terminal and store it at Latvia's Inčukalns gas storage facility.

He noted that Gazprom's pricing policy, which he described as "the square root of the customer's friendliness," was among the reasons for the LNG market expansion. In his words, the formula according to which the Russian giant sells gas is very complex and makes prices almost unpredictable.

After Gazprom's discount of about 20 percent

After Gazprom's discount of about 20 percent on gas supplies to Lithuania, which was given in 2014, ends, Eesti Energia's subsidiary Enefit plans to sell gas in Lithuania.

According to Tihane, Enefit will initially hold less than 10 percent of the market, but it plans to expand after a common Baltic gas market starts functioning in 2020.

Editor: Aili Vahtla

Source: BNS