Wednesday, October 5, 2022

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Baltics and Finland towards regional gas market integration

Energy ministries, regulators and transmission system operators from Estonia, Finland, Latvia and Lithuania agreed on a roadmap establishing a process for the future regional gas market integration of their respective countries.

This common regional gas market will be the first four-country wide cross-border gas market merger in the European Union. It will reinforce the security of supply in this region strongly dependent on imported gas, increase market liquidity and foster competition, resulting in affordable gas prices and high-quality service for all consumers in these countries.

The Regional Gas Market integration process started as a political process in December 2015 when the Baltic States’ Prime Ministers endorsed the Regional Gas Market Development Action Plan and invited Finland to take part in this process. The objective is to improve market liquidity, integration and competition, ensuring affordable gas prices and high-quality service, thus being attractive for existing and new market participants.

Key actions taken towards a market integration include the creation of a joint tariff area between the four countries and deeper market integration through investigating potential bottlenecks and identifying IT-systems and commercial operating common models.

Market integration is a clear opportunity for the Baltic States and Finland to reap all the benefits of their existing and future infrastructure such as gas storage facilities, LNG terminals, the Balticconnector and the Gas Interconnection Poland–Lithuania (GIPL). It will remove many of the remaining divisions between four relatively small and separate national markets, attracting suppliers and significantly increasing competition.

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