Page 5 - EurOil Week 07 2023

EurOil COMMENTARY EurOil

from 16.3TWh in 2021, although 4.6TWh was to Poland has been enabled providing a further
exported to Poland. Nevertheless, it marked the boost to energy security for the region.
largest sendout since the LNG terminal opened Additionally, Latvia is now preparing to con-
in 2014. struct an LNG terminal of its own. The Skulte
LNG demand in Estonia is also expected LNG Terminal will include a floating regasifi-
to get a boost since several Estonian utilities cation unit located at the Skulte port area about
applied for exemptions to burn fuel oil last year 2.5 kilometers offshore from the coastline.
given the high gas prices. The expiration of these It will have a pipeline connection that spans
exemptions at the end of the upcoming winter 34 kilometers to link it with Incukalns. A key
is expected to place further pressure on LNG advantage for the project too is that it will not
imports. require investment in LNG storage infrastruc-
ture, which typically comprises up to 80% of a
Expanding LNG infrastructure terminal’s investment. Once commenced, devel-
The Baltic nations have been quick to expand opers believe the project could be finished in 16
their LNG infrastructure to accommodate an months.
increase in imports. Through the Enhancement Considering that the Incukalns underground
of the Latvia-Lithuania interconnection (ELLI) gas storage facility is the third-largest gas storage
project, the capacity of the gas pipeline between depot in Europe, the ingredients are there for
the countries has been increased by one-third, Latvia to potentially emerge as a regional trading
with the pipeline from Lithuania’s Klaipeda hub for LNG. With the region becoming more
LNG terminal to Latvia now able to transmit 90 closely interlinked with Finland, which has con-
gigawatt hours (GWh) per day. siderable demand, the pieces of the puzzle are
As a result, the region’s gas supply opportuni- starting to be put together.
ties have been strengthened while enabling faster For now, Latvian utility Latvenergo AS will
filling of Latvia’s Incukalns underground gas continue to have LNG cargoes delivered to the
storage facility, where gas for the region is stored. Klaipeda terminal. Plans are also in place begin-
Meanwhile, with the inauguration of the gas ning in 2024 for Latvia to import cargoes under a
interconnection between Poland and Lithuania 10-year supply deal linked to either US or Euro-
(GIPL) in May 2022, gas transport via pipeline pean price indexes. ™

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