Lithua­nia's LDT gain­ing foothold in Lat­vian mar­ket with cheap LNG

The Baltic Times - - BALTIC NEWS - BNS/TBT Staff

Lithua­nia's nat­u­ral gas sup­ply and trade com­pany Li­etu­vos Duju Tieki­mas (Lithua­nian Gas Sup­ply, or LDT), which buys liq­ue­fied nat­u­ral gas (LNG) from the United States, says that it had signed a sup­ply con­tract with Latven­ergo, Latvia's largest gas con­sumer, adding that it ex­pected to gain a 10 per cent mar­ket share in the neigh­bour­ing mar­ket this year and to be­come its se­cond-big­gest gas sup­plier af­ter Latvi­jas Gaze.

Dominykas Tuckus, a mem­ber of the man­age­ment board at Li­etu­vos En­ergija (Lithua­nian En­ergy), which owns LDT, says that one of the fac­tors that have helped LDT to gain a foothold in the Lat­vian gas mar­ket this year is the state-owned en­ergy group's non-bind­ing agree­ments with var­i­ous global LNG play­ers.

"This is not a one­off deal. The Li­etu­vos En­ergija Group has al­ready had trad­ing ac­tiv­i­ties in the other Baltic coun­tries and we still man­age to find ways to main­tain our com­pet­i­tive­ness. We are prob­a­bly among the few in the Baltic states with a wide range of com­mer­cial con­tacts with global LNG sup­pli­ers and we have a suf­fi­cient port­fo­lio that al­lows us to op­ti­mally re­gasify that amount," he said.

Man­tas Mikala­ju­nas, CEO of LDT, em­pha­sised that LNG would make up the bulk of the 1.2 ter­awatt-hours of gas that the com­pany plans to sell Latvia this year.

"Prac­ti­cally all gas will go (to Latvia) via the (Klaipeda) LNG ter­mi­nal," he said.

Two US LNG car­goes of around 140,000 cu­bic me­ters each are to be de­liv­ered to LDT in Au­gust and Septem­ber. Mikala­ju­nas said that a part of the gas would be used in Lithua­nia, an­other part would go to Lat­vian com­pa­nies, and yet an­other part would be stored in the neigh­bour­ing coun­try's In­cukalns un­der­ground gas stor­age fa­cil­ity.

Ac­cord­ing to the CEO, the first gas de­liv­er­ies to Latvia started back in June. Trade was slug­gish at that time but picked up in July when Lat­vian com­pa­nies had to de­cide whether they would con­tinue to pur­chase gas from the for­mer mo­nop­o­list Latvi­jas Gaze or look for new sup­pli­ers.

"Most com­pa­nies made no moves and stayed with Latvi­jas Gaze, but they can change the sup­plier at any time. This is where the mar­ket po­ten­tial lies," he said.

Mikala­ju­nas told BNS that LDT had al­ready started pump­ing gas to the Lat­vian stor­age fa­cil­ity, but he did not dis­close any de­tails, say­ing that it was not clear yet how much gas would have to be stored there.

"I can't say ex­actly, be­cause this will de­pend on con­sump­tion in Lithua­nia and Latvia, but it will def­i­nitely be more than the manda­tory amount to be stored," the CEO said.

When and what amounts of gas will be with­drawn from the stor­age fa­cil­ity and sup­plied to mar­ket will de­pend on prices, he added.

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