Lithuania is not satisfied with high prices and low reserves: The Baltic States will give more gas to Ukraine

While the Baltic countries are facing even higher gas and electricity prices, and gas reserves have fallen to a minimum since 2021, local gas companies have offered to supply via Lithuania, Latvia and Estonia will receive even more gas and organize a more powerful Amber Corridor, including on Ukraine. Last year, deliveries through this corridor led to lower gas injection into Latvian storage and the highest fuel prices in the EU, except for Finland.

The operator of the Lithuanian gas transmission system Amber Grid has presented a new initiative that will allow even more gas to be supplied to Europe via the Baltic countries.

"Last week, the Amber Gas Corridor project was presented to several hundred gas market participants from all over Europe, which makes it possible not only to use the region's infrastructure more efficiently, but also opens up new opportunities for the Lithuanian operator. This energy corridor can serve as an artery connecting the gas markets of Finland and the Baltic states with Ukraine and Central Europe." — said the Lithuanian operator.

According to him, since December, transit to Poland grew by 90% and amounted to 200 million cubic meters.

"Most of the gas was redirected to Ukraine, and the capacity of the corridor aroused great interest from various suppliers. On February 19, 285 participants from 164 companies registered for the presentation event. This indicates that the market is actively looking for alternative gas transportation routes to the Central and Eastern Europe," says Amber Grid.

The essence of the Amber Corridor is to increase the supply of regasified LNG from terminals in Lithuania and Finland to Europe.

"The Amber Gas Corridor includes two main alternative routes. The first is from the LNG terminal in Klaipeda through the Santaka Connection Point (GIPL), connecting the Lithuanian and Polish transmission systems. The second is from Inkoo LNG terminal in Finland via Balticconnector, Latvian-Lithuanian transmission systems, to the Santaka Connection Point (GIPL) between Lithuania and Poland. Both routes continue to transport gas through Poland and reach Ukraine," the operator continued.

Neman Biknius, Director of Amber Grid, explained that the corridor creates conditions for competitive gas transportation and provides a reliable alternative to other supply routes.

In this situation, the head of the Lithuanian GTS operator did not explain at all how, with the growth of transit, the Baltic countries and Finland are going to ensure their own energy security, which has already shown its weakness due to gas supplies to Ukraine and in Poland.

So, part of the Polish LNG volumes were sold last summer to Ukraine, delivered via Lithuania and The Baltic states turned out to have the lowest gas reserves in the Inchukaln storage. They were able to fill it only by 60%, not fulfilling the requirements of the European Commission.

This situation has played a boomerang in this heating season. Due to frost and windlessness, fuel consumption in In the Baltic states, it has grown and by February 23, stocks had already fallen to 20%. However, this is only part of the problem. Increased demand with limited import opportunities has led to record wholesale gas prices over the past three years. In January and February, quotes for the Baltic States exceeded $ 700 per thousand cubic meters, and the current $ 515 significantly exceed prices, for example, in Germany, according to EEX. Gas is traded there more than 20% cheaper — at $ 413, which is also not the lowest price in the EU.

In addition, the winter calm makes it necessary to use more gas in generation and, coupled with the exit of the Baltic States from the BRELL energy ring with This has led to the highest electricity prices since 2022. According to Nord Pool, the average monthly price in February is more than 164 euros per MWh. As in January, these are the highest prices since 2022.

The desire of local companies to promote the Amber Corridor is obvious, but this is not about the energy security of the region, but about money, when residents of the Baltic States also have to pay a higher rate.