Estonian Natural Gas Price Approaches European Gas Market Prices

Since the launch of the liberalisation process of the gas market at the turn of the year, the price of imported natural gas has been continually decreasing and is approaching European gas market prices.

According to Elering’s calculations, the average price of Gazprom’s natural gas imports to Estonia was 18.80 euros per megawatt-hour in October, which is 41 per cent lower compared to the beginning of the year. On German gas exchange GASPOOL the monthly average price of the day-ahead transactions was 18.31 euros per megawatt-hour in October. Therefore, Estonia’s price was only half a euro higher compared to the price in Germany.

In Lithuania, the average price of natural gas traded on the Get Baltic gas exchange in October was 17.49 euros per megawatt-hour, and on the Kaasupörssi gas exchange in Finland, comparable gas prices were in the range of 17.10 to 20.25 euros per megawatt-hour.

In October this year, gas sellers imported 9.3 million cubic metres of natural gas from Lithuania, totalling 23 per cent of Estonia’s gas import. Last month, natural gas was imported from Lithuania by Baltic Energy Partners, Eesti Energia and Reola Gaas. The remaining gas was imported from Russia by Eesti Gaas.

Altogether, 40.9 million cubic metres of natural gas were imported to Estonia last month, which is eight per cent less than in October 2014.

In October, 43.2 per cent of natural gas was imported via Karksi and 56.7 per cent via Värska. The amount of gas imported to Estonia ranged between 0.7 to 3.1 million cubic metres per twenty-four-hour period and there were no disturbances in the cross-border gas supplies.

In October, the volume of natural gas transmission services rendered by Elering was 40.9 million cubic metres. Of that, the amount of services rendered to the biggest natural gas distribution network – AS Gaasivõrgud – was 36.5 million cubic metres, totalling 89 per cent. The estimated gas reserve of the gas transmission pipeline increased by 1.5 per cent in a yearly comparison, reaching 4.0 million cubic metres. Compared to September, the reserve decreased by 3.0 per cent.

Last month, 73.3 million cubic metres of natural gas was delivered from Russia to Latvia through the gas transit pipeline passing through southeast Estonia, which is 20 per cent of the transit volume in October last year. The decrease is due to the fact that the filling of the Inčukalns underground gas storage facility in Latvia with the gas from Russia was completed in September this year.

The Inčukalns underground gas storage facility in Latvia was filled 85 per cent at the end of October.

The full report for the gas market of October is available here.