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News // Oil and gas worldwide

Lithuania's gas exchange Get Baltic expects growth due to expiring Gazprom discount

01 May 2017 , 12:01Neftegaz.RU358

The Lithuanian gas market Get Baltic, which is launching operations in Latvia and Estonia in July, projects growth, however, not only due to larger market but also due to the gas price discount applied by Gazprom 3 years ago and due to expire in mid-2017.

 

«We are still waiting for the Gazprom discount on natural gas to be deplete. The circumstance is not in our favor as the market operator, as the discount cannot be applied on gas sold on the market, and this has an effect upon volumes. As soon as the discount expires, prices for gas purchased under bilateral contracts, the prices can become similar to those on the market, therefore, the activity should increase,» Gintaras Buzkys, acting CEO of Get Baltic, told.

 

Market players have repeatedly said that gas trade will recover after expiry of about 20 % discount applied by Russia's Gazprom to Lietuvos Duju Tiekimas (Lithuanian Gas Supply), as other market players cannot compete with the market.

 

In the 1st quarter of this year, the volume of gas volume on the gas market narrowed by a factor of nearly 7, from 74,700 to 11,500 MWh, year-on-year.

In Buzkys' words, the gas trade volume should increase after founding of trading sites in Latvia and Estonia.

 

«A tendency is already clear that there is huge interest, especially from electricity companies in Latvia, to participate in the natural gas sector, as they are actively registering as gas suppliers,» said the acting chief of Get Baltic.

 

Buzkys expects extremely high interest in Latvia where companies want to start trading gas after the gas market was liberalized earlier in April.

Currently, 61 players are registered on the market, including four Latvian companies.

 

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