Gas company Eesti Gaas finds it doubtful Estonia will be able to stockpile the 1 terawatt-hour of gas it needs for the coming heating season should the LNG terminal plan fall through. The first procurement yielded only a tenth of the required volume, with the Estonian Stockpiling Agency (ESA) forced to hold additional tenders.
The Estonian Stockpiling Agency invited 27 gas sellers to the first public procurement. CEO of Eesti Gaas, that also participated, Margus Kaasik said that the low number of bids means the gas market remains uncertain.
"The bids did not amount to 1 TWh. The market was not willing to pledge that much gas. Sellers are uncertain and tend to sit on gas for themselves and their existing customers to play it safe," Kaasik said.
Timo Tatar, undersecretary for the Ministry of Economic Affairs and Communications, said that the results of the first procurement were to be expected and reflect the situation on the gas market.
Procurement conditions ruled out the participation of Russian gas, while there is clear deficit of gas from elsewhere and supply sources, Ando Leppiman, head of the Estonian Stockpiling Agency, said. The Klaipeda LNG terminal remains the only way to source non-Russian gas.
"The problem is availability. Also, price, as it is insensible to buy gas at prices you cannot really expect the consumer to cover. But we cannot describe the situation as catastrophic either. Our task is to procure 1 TWh of gas by year's end or by autumn, and I remain optimistic in terms of achieving that goal," Leppiman said.
Kaasik said it is by no means certain Estonia will manage to buy the necessary quantity at future tenders. "While they might see more bids, I remain skeptical in terms of whether we can secure the necessary 1 TWh of gas," Kaasik suggested.
The state gas stockpile is meant to make sure people who rely on gas for heating can keep warm in the winter should Estonia fail to create the capacity to receive liquified natural gas (LNG) in Paldiski this year. "Growing the gas stockpile is just one of the ways we will be ensuring energy supply for the coming winter," Timo Tatar said.
Editor: Marcus Turovski