Development of the Baltic regional gas market has been accelerating in recent years. The Estonian gas market has been open to market participants since 2007, however, until recently, the main barrier to competition has been the lack of a functioning gas wholesale market and high gas transmission costs between different countries.
In spring 2017, the Baltic gas transmission system operators (Elering AS from Estonia, Connexus Baltic Grid AS from Latvia and AB Amber Grid from Lithuania) reached a common agreement to facilitate gas transmission between the countries. This ultimately prompted Elektrum to start selling gas to business customers in Estonia, in addition to electricity.
In the open gas market, every consumer can choose a gas seller that suits them best, whereas, it does not matter to which network the consumption point is connected.
Where does the gas come from?
In the Baltic region, there is a gas exchange in Lithuania operated by UAB GET Baltic since 2014 and a jointly operated gas exchange in Estonia launched in July 2017 by Elering AS and UAB GET Baltic. The gas exchange market’s goal in coming years is to operate in Estonian market in the same way as the power exchange market Nord Pool is doing today. The Finnish-Baltic joint gas market development plan makes provisions for an even larger market area by 2020, when the Balticconnector pipeline between Estonia and Finland will be completed.
Gas supply sources can be very different and as the gas market develops, also more diverse, for example, LNG and renewable, i.e. biogas in addition to natural gas. The Inčukalns Underground Gas Storage Facility in Latvia (with a capacity of up to 3 billion cubic meters of gas) is also physically located in the Baltic region. The owner company of Elektrum - Latvenergo - also stores gas for its electricity production in the Inčukalns facility.
The volumes of the Baltic gas market are different not only in volume numbers but also for historical reasons. For example, in Latvia, the range of gas consumption is much wider, with an annual market volume of 14.4 TWh, while the volume of the Estonian gas market is almost three times smaller, only 5.4 TWh. This is less than the annual consumption of the Latvenergo’s combined heat and power plant in Riga, which amounts to 6.1 TWh. In Lithuania, the annual gas market volume is 22 TWh.
This makes Latvenergo the largest gas consumer in Latvia and throughout the Baltics, as well as provides confidence for our customers that we have enough gas to supply.
What does Electrum offer?
For companies and apartment associations, we offer fixed gas prices for up to a 2-year period. The gas price remains unchanged throughout the whole period of the contract, it is clear and understandable and provides the greatest assurance for the planning of energy costs.
To get an offer, please contact our sales department using the contacts here. Become our gas client!