Recent developments regarding the natural gas transmission and storage in the 2022/2023 storage cycle

The Public Utilities Commission (PUC) has approved the capacity auction calendar of the Inčukalns underground gas storage facility of the system operator JSC Conexus Baltic Grid (Conexus) for the 2022/2023 storage cycle. There are no significant tariff changes for the 2022/2023 storage cycle and no tariff changes are planned for natural gas transmission services this year.

Auction calendar

In accordance with the amendments to the Regulations on the Use of Inčukalns Underground Gas Storage Facility approved by PUC in December 2021, the system operator Conexus must publish an capacity auction calendar agreed with PUC for the next storage cycle on its website by 10 January each year. This decision was adopted to improve the transparency of auctions of natural gas storage capacity products and to stimulate the interest of market participants in the possibility to store natural gas in the storage facility. PUC has approved the auction calendar submitted by Conexus on 23 December 2021 for the next storage cycle, and it has been published on the Conexus website.

According to the auction calendar, the auctions of the one-year bundled capacity product shall be held every Tuesday, from 1 February 2022 to 14 June 2022 (inclusive). The auctions of the two-year bundled capacity product shall be held every Tuesday, from 1 February 2022 to 24 May 2022 (inclusive). Meanwhile, the auctions of the interruptible capacity product are scheduled for every Tuesday, from 28 June 2022 to 27 September 2022 (inclusive).

Tariffs for storage capacity products for the 2022/2023 storage cycle
Evaluating the results of the previous storage cycle, storage capacity forecasts for the next storage cycle and the natural gas market situation, PUC has not objected to Conexus' proposal for the 2022/2023 storage cycle to maintain the tariff values of the following capacity products at the storage cycle level:

• the bundled capacity product tariff (excluding VAT): 1.0226 EUR/MWh/storage cycle;
• the two-year bundled capacity product tariff (excluding VAT): 1.0865 EUR/MWh/for one year period;
• the interruptible capacity product tariff (excluding VAT): 0.8147 EUR/MWh/storage cycle;
• the virtual reverse flow product tariff (excluding VAT): 0.3471 EUR/MWh/storage cycle.

In accordance with the current regulatory framework, the tariff for the stock transfer product shall be set in such a way as to ensure that it would be more cost-effective for the users of the natural gas storage system to plan the amount of stored natural gas accurately or purchase the two-year bundled capacity product. Accordingly, the tariff value of the stock transfer product for the 2022/2023 storage cycle has been harmonized with the result of the two-year bundled capacity product auctions of the 2021/2022 storage cycle. Consequently, the tariff for the stock transfer product (excluding VAT) is 1.8081 EUR/MWh/storage cycle.

The decision on the application of the tariff for the stock transfer product is available on the PUC website.

Natural gas transmission system tariffs

In accordance with the decision on tariffs for natural gas transmission system services which is currently in force, the current regulatory (tariff) period ends on 30 September 2022. Given the wide-ranging discussions on Lithuania's possible accession to the single entry-exit system of Finland, Estonia and Latvia (single natural gas market) and the planned revision of the natural gas transmission tariff methodology (to be consulted under the European Union regulation), the exact beginning of the new regulatory period is unknown at the moment. It is planned that the tariff will not change in 2022.

PUC will inform separately about the upcoming changes in the methodology, as well as about the receipt of the relevant tariff submitted by the transmission system operator. According to the decision currently in force, the existing tariff will apply until the beginning of the new regulatory period.