Estonia manages to procure fifth of planned gas supply
Estonia's second gas supply tender saw the Estonian Stockpiling Agency offered 100 gigawatt-hours of gas. The two tenders have managed to secure just 20 percent of Estonia's planned gas stockpile of 1 terawatt-hours.
The government in spring ordered the Estonian Stockpiling Agency (ESPA) to procure a strategic gas stockpile of 1 TWh. The first tender in which 27 service providers were invited to participate yielded 100 gigawatt-hours of gas. The four bids of the second round yielded another 100 GWh.
To buy the quantity, the government plans to boost ESPA's share capital by €19.2 million. Member of the board Priit Ploompuu said that while he does not wish to disclose the price of gas on offer, the sum is indicative of how much it will cost.
Simply dividing the €19.2 million by the amount of gas to be procured puts the price at €192 per megawatt-hour. Dutch TTF gas futures put the market price at €155 per MWh. The price on the Dutch exchange was €180.5 on July 13.
Ploompuu said that the second tender ended up costing more because of higher market prices.
ESPA plans to declare a new tender in August at the latest to source the remaining 800 GWh of gas Estonia needs. Ploompuu said the company still hopes to hit its target of 1 TWh.
"It is possible. We will not be giving up yet as I'm sure it can be done," Ploompuu noted, adding that alternatives need to be taken seriously nonetheless. "Our tenders also show that procuring 1 TWh of gas is not easy today."
The Incukalns gas storage facility in Latvia where the Estonian Stockpiling Agency keeps its supply currently holds 10.6 TWh of gas, according to Latvian grid operator Conexus. Ploompuu suggested that while this shows there is gas in the region, most of it has been covered with contracts and reserved.
"It is difficult to bring gas here. The market is very different from last summer. Back then, gas was coming from pipelines, It isn't today," he said.
The Riigikogu allocated €170 million for a strategic gas stockpile in the May supplementary budget.
In addition to ESPA's strategic stockpile, system operator Elering procured a stockpile of 105 GWh this spring meant primarily for protected consumer groups, or home consumers and gas-powered district heating boiler plants.
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Editor: Marcus Turovski