A year of high gas consumption throughout a cold winter and a chilly spring, depleted gas storage facilities and post-pandemic recovery of the world’s economies have led to significant increases in gas price indices on international exchanges. While gas consumption in Lithuania has grown, high prices have reduced gas transmission to other Baltic countries.
In the first half of 2021, 15.4 terawatt hours (TWh) of gas were delivered to Lithuania, excluding transportation to the Kaliningrad Region. This is almost the same as the 15.3 TWh transported to Lithuania at the same time last year. The pipeline interconnection to Latvia transported 0.6 TWh of gas to the Baltic States, a 78% decrease compared to the first half of 2020, when the record low prices on the gas market and the large spread between warm season prices and futures for the coming winter resulted in a very large transport of 2.5 TWh of gas towards the Baltic States.
“The cold winter that hit Europe and other parts of the world has emptied gas storage facilities, which suppliers are seeking to fill before the next heating season, despite the sharply rising price of natural gas on the exchanges. In addition, the steep rise in the price of emission allowances is leading European industry to replace coal with less CO2-emitting natural gas. Demand for gas is also being boosted by Asian markets recovering from the pandemic, and gas suppliers are also shifting their shipments more towards Asian consumers. These global reasons have led to a reduction in gas flows from Lithuania to Latvia, and suppliers are filling the Inčukalnis gas storage facility more cautiously, while monitoring future price trends,” said Nemunas Biknius, CEO of Amber Grid.
Gas consumption in Lithuania continues to grow. In the first 6 months of the year, 14.7 TWh of gas was consumed in Lithuania, which is 17.1% more than in the same period last year, when gas demand was 12.6 TWh. This year’s higher gas consumption is due to the extremely cold winter and prolonged cool spring weather, which resulted in a prolonged need for gas for power generation in the heat and electricity sectors.
The Klaipėda LNG terminal remains the most important source of gas supply for Lithuania and the Baltic States. In the first half of the year, the terminal supplied 9.4 TWh or 61% of the total gas injected, 2.5 TWh or 16% from Latvia, and 3.6 TWh or 24% from Belarus to Lithuanian, Baltic and Finnish consumers.
Gas transported from Belarus via Lithuania to the Kaliningrad Region in the first half of this year amounted to 13.8 TWh, which is 12% more than in the same period last year, when 12.4 TWh of gas was transited through our country to Kaliningrad.
Gas is supplied to Lithuania via the Klaipėda LNG terminal and from Russia via Belarus and Latvia. The gas interconnector between Poland and Lithuania, due to come on stream in 2022, will create another alternative source of gas supply, bringing gas from various sources via Poland to Lithuania, the other Baltic countries and Finland.
