High demand for natural gas storage boosts Conexus revenue

The turnover of the single natural gas transmission and storage system operator Conexus Baltic Grid (Conexus) in the first 9 months of this year has reached 52.38 million, which is 33% more than in the same period of the previous year, according to data on the company's performance in the first 9 months of 2023. The increase in revenues was driven by strong demand for services from the Inčukalns underground gas storage (UGS) facility, while at the same time covering a decline in transmission services due to both warm weather and high natural gas prices.

At the end of the reporting period on 30 September 2023, 20.8 TWh of natural gas (including energy security reserves) had been stored in Inčukalns UGS, an increase of 65% compared to the same period last year. In total, 21.7 TWh of natural gas was stored in Inčukalns UGS at the start of the withdrawal season on 15 October, making the withdrawal season the largest in the last five years.

Meanwhile, natural gas consumption for Latvian users in the first nine months of 2023 amounted to 5.3 TWh, which is 9% less than in the same period of the previous year. Several factors have contributed to the decrease in natural gas consumption. Firstly, the weather conditions during the winter months were milder than in the corresponding period of 2022, which resulted in a lower demand for heating natural gas from users than in the corresponding period of the previous year. Secondly, the unprecedentedly high natural gas prices, which led users to reduce their consumption of natural gas. The total volume of natural gas transported during the period under review amounted to 23 TWh, a decrease of 2% compared to the same period of the previous year.

In the first nine months of 2023, Conexus ensured uninterrupted natural gas supplies to Latvia, Lithuania, Estonia and Finland. In line with the Energy Law's prohibition to supply natural gas from Russia, there were no natural gas supplies from Russia during the reporting period. Instead, natural gas traders supplied natural gas from Klaipeda LNG terminal, Inkoo LNG terminal and Inčukalns UGS. During the natural gas injection season, around 70% of the total gas volume was supplied to the common area of Latvia and Estonia from Lithuania and 30% from Finland.

"When describing the supply of natural gas to Latvian consumers, it should be emphasised that it is stable and reliable. The natural gas market has adapted to new natural gas supply routes, while we as the system operator continue to ensure stability and continuity of natural gas supply," says Uldis Bariss, Chairman of the Board of Conexus.

During the period under review, storage service revenues and EBITDA exceeded the corresponding period of the previous year, thus offsetting the decline in transmission service, which naturally also had an impact on revenues and EBITDA. During the period under review, EBITDA increased by 45% compared to the result for the corresponding period of 2022 and amounted to EUR 33.49 million, while Conexus' profit was EUR 4.7 million, down by EUR 2.16 million compared to the corresponding period of the previous year.