PUC gives the green light to enhancement of Inčukalns underground gas storage

The Council of Public Utilities Commission (PUC) has made a decision granting support to JSC “Conexus Baltic Grid” so that is has a possibility to attract the co-financing from European Union (EU) for enhancement of operation of Inčukalns underground gas storage. The Council of Regulator makes a decision regarding the allocation of investment costs for the project of common concern „Enhancement of operation of Inčukalns underground gas storage”.

This decision means that JSC “Conexus Baltic Grid” (Conexus) can apply for EU co-financing to start implementing the project „Enhancement of operation of Inčukalns underground gas storage”. The final decision about the amount of the granted con-financing will be adopted by the European Commission.

At the same time, the decision prescribes that the average influence on natural gas storage costs during the project implementation cannot exceed 18%. If 18% are exceeded, the project implementation must be reviewed.

The aim of the project „Enhancement of operation of Inčukalns underground gas storage” is to extend the operation of storage so that Inčukalns underground gas storage could maintain its functionality after the increase of pressure in Baltic transmission system. The main benefit from implementation of the project is the ability to reduce the removal capacity depending on the gas reserve volume in Inčukalns underground gas storage.

All Baltic States shall have positive influence from project implementation for the period of 20 years – from 2026 to 2046. Latvia has the largest benefit – 150.8 Mio. EUR, net benefit of Lithuania and Estonia respectively doesn’t exceed 10% of the total calculated net benefit for Baltic States so there is no need for compensations among Baltic States. The cross-border allocation of costs offered by CBG prescribes that the whole amount of investments refers to Latvia and is covered by “Conexus”. The project is included in the Regional gas investment plan 2017 of Baltic Energy Market Interconnection plan, Community’s Gas Network development 10-years plan of European Gas Transmission System operators and in the list of projects of common concern.