According to Eesti Energia's energy market overview, European gas storage facilities are currently so full that some Liquified Natural Gas (LNG) carriers have no choice but to wait at sea.

"This situation had indeed already arisen in early October. On the one hand, gas demand in Europe is very low because the weather has been warm. For example, recently it was (as high as) 20 degrees in Germany. On the other hand, there is no gas for heating, yet, industrial consumers are also using much less (gas) because, up to now, the price has been expensive," Kaasik said.

Kaasik said, that because there is currently little to no gas consumption, LNG ships are cruising the seas as they simply cannot deliver gas to terminals, which are already full.

"The (storage) tanks across Europe are 95 percent full. And there is no use for the gas," he said.

"Because LNG has to be used up once it turns into a vaporizable gas, LNG ships will cruise around and burn up that gas in their engines. You can't put that methane into the atmosphere, it's a pretty crazy greenhouse gas. They just burn it off. About 0.15 percent of that gas volume evaporates every day and so has to be used up in some way. Some ships have re-gasification equipment (to warm and vaporize the liquified gas in order to transition it back into gas form – ed.) , but many don't," said Kaasik.

According to Kaasik, the LNG ships could remain out at sea for another month, or even two, awaiting a time when the natural gas they are carrying is in higher demand. "The weather forecast at the moment says that November will also be rather warm. I think that, to some extent, the current situation will remain as it is for another month, maybe even longer," Kaasik said.

Kaasik added, that while gas prices on the European spot market have now fallen to €20-30 per megawatt-hour (MWh), in Estonia gas still costs over €100 per MWh.

"There are two reasons why (the prices) are not so low here. First, we don't have an LNG terminal. If we had one now, then we would also have (prices of) €20-30 euros per MWh. But we can't import that price from Europe. We do have connections with Europe through Poland and (also) through Latvia and Lithuania. However, both of these border crossings are like bottlenecks, especially the crossing with Latvia and Lithuania. Lithuania also has cheaper gas prices today than Estonia. We have a quay built, but we don't have a terminal," Kaasik said.

According to Kaasik, the situation is likely to improve when the LNG terminal at Inkoo, Finland starts operating. "That will change the picture somewhat. It will then be possible to import more of this gas into our region, and those borders with Europe will no longer affect us so much," Kaasik said.

Kaasik also discussed recent suggestions that, for Estonia to have priority access to the Inkoo LNG terminal, it would need to buy a share in the facility.

"I think from (Finland's) point of view, it's the right question (to ask). (They) are paying for the ship and (we) want to benefit. So where does that fit in. How it will end? Let's see. But it is not really an outrageous claim," Kaasik said.

Kaasik also said, that he believes the newly constructed quay with LNG storage capacity in Paldiski, will eventually be used. "There are a lot of countries in Europe, where it is not possible to build their own LNG terminal and who have to rely on terminals in other countries for their flow of gas. At some point, gas consumption in our region will also increase and it is very possible that the Lithuanian (Klaipeda – ed.), Finnish (Inkoo – ed.), and potentially Paldiski terminal too, will become part of the overall security of Europe's supplies . This is a very real possibility," Kaasik said.

When discussing gas prices, Kaasik stressed that they are heavily dependent on the weather. "If the weather continues to get warmer, there will be a downward trend in gas prices," said Kaasik.

"The current forecast is rather positive. I think prices will get even cheaper. It's certainly not out of the question that at some point these winter prices will come down to below a hundred. What we are seeing today on the European spot market is that €20-30 is quite a normal price. I think that this is the price we will get (in Estonia – ed.) if the European futures prices also reach this level. And if this winter still continues to be mild, that could well happen. I wouldn't rule out that possibility, but at the moment we can't get our hopes up too much either," Kaasik said.

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