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Balticconnector’s shutdown could lead to huge economic losses

Estonian and Finnish energy companies are appealing the Latvian government and to the system operators of Finland and the Baltic States, due to stoppage of operation of the transnational Balticconnector pipeline.

“Energy companies of the Baltic States and Finland cannot agree with the plan of [the Latvian natural gas transmission and storage operator] Conexus Baltic Grid to stop the operation of the Balticconnector between Estonia and Finland for entire May 2020 at such short notice and at the time which is critical enough already,” reads the statement. “The stoppage is due to planned reconstruction of the Vireši-Tallinn pipeline by Conexus Baltic Grid which was published only on the 20th of March 2020.”

The Balticconnector is a gas pipeline linking the Finnish and Baltic gas markets, thus enabling their integration with the European Union’s common energy market. Furthermore, the construction of new gas infrastructure in the Baltic states will allow bi-directional gas transmission between Estonia and Latvia. Combined with Balticconnector, this infrastructure will provide Finland and Estonia with access to underground storage in Latvia to meet the market demand.

According to the signatory companies, such reconstruction works would stop the operation of the Balticconnector pipeline for the entire month of May while the use and volumes of the pipeline have been relied upon by all market participants, thus the resulting damage will amount to millions of euros. Additionally, the reconstruction works have not received approval of the Estonian, Lithuanian and Finnish system operators.

“Such hasty behaviour which does not take interests of the market participants into account puts the reliability of subsequent operation of the pipeline, as well as cooperation capacities and energy security of the states, in serious doubt,” said Ants Noot, Estonia’s Eesti Gaas Chairman of the Management Board, together with Kalev Reiljan, Member of the Management Board of Finnish Elenger, and Oy Aivo Adamson Member of the Management Board of Alexela in Estonia.

The Balticconnector pipeline had started its operation early in January. Both Finland and Estonia had welcomed the project as it will improve the regional security of supply by diversifying gas sources and create a framework for market opening and growth and enable the use of alternative sources, such as liquid natural gas (LNG) and biogas.

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