Undersecretary: €50 price of gas could return in 2026

Ministry of Economic Affairs and Communications deputy secretary general Timo Tatar.
Ministry of Economic Affairs and Communications deputy secretary general Timo Tatar. Source: ERR

It is possible that the price of natural gas will not fall back to €50 per megawatt-hour until 2026, Timo Tatar, deputy secretary general of the Ministry of Economic Affairs and Communications, said on the "Esimene stuudio" talk show on Tuesday.

Alexela board member Marti Hääl said at the Riigikogu Finance Committee sitting on Tuesday that the currently high price of gas is caused by infrastructure bottlenecks, and that going with LNG, the price should not exceed €50/MWh if the government ensured a stable environment and companies could enter into long-term international contracts.

Timo Tatar did not agree. "Lithuania has an LNG terminal in Klaipeda, and looking at the price in Lithuania and comparing it to Estonia, I do not see the Lithuanians selling gas at €50/MWh while our price is based on the infamous Dutch market index that today hovers around €200/MWh. In truth, the price of gas is more or less the same all over Europe and determined by the Dutch index," Tatar commented.

"Looking at gas forwards, there is willingness to offer €50/MWh in Europe starting in 2026. Therefore, the gas market will surely normalize and reach the €50 price point again eventually. But we will not see it in the near future, irrespective of whether the LNG terminal is in Estonia or Finland," Tatar suggested.

Tatar: Nord Stream leak likely result of human activity

Tatar also commented on the Nord Stream leak.

"It is likely that the leak did not just happen and that human activity has been involved. The situation is as worrying as it is extraordinary. We will learn more in the coming days," the undersecretary said.

Tatar does not believe an anchor caused the leak.

"It would have to be a special anchor indeed that can hit pipes tens of miles apart in three locations at the same time. The pipe is five centimeters of solid steel covered by 5-10 centimeters of reinforced concrete. It does not break that easily. Creating such leaks requires effort. Plus, we are talking about relatively new structures."

"It seems that someone was interested in demonstrating their willingness and capacity to undertake such operations. At least that is what it looks like presently," Tatar said.

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Editor: Marcus Turovski

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