JSC “Conexus Baltic Grid” submits the new draft storage tariff

Today JSC “Conexus Baltic Grid” submitted the new draft storage tariff to the Public Utilities Commission (PUC). This draft tariff contains three new principal products that are targeted so that their application is convenient and economically reasonable in the new natural gas market conditions. When elaborating the new draft tariff, JSC “Conexus Baltic Grid” assumes that the suction volume could increase in 2018.

The tariffs are elaborated on the base of the tariff calculation procedure prescribed by PUC on 16 March 2017. The total storage system costs include in the draft tariff 2018 have reduced by 35% when compared with the previous approved storage tariffs that is related mainly with the changes in the tariff calculation methods as to the technological process provision costs by determining that the costs used to provide the compressor operation ae covered by the storage users in addition to the defined tariffs.

Although a considerable reduction of costs is observed when compared with the previous draft tariff, the aims of storage usage and sellers’ duties have also changed. When opening the natural gas market in Latvia, there was the historically lowest suction volume in 2017 during the last ten years. In 2017, 11,36 TWh natural gas was pumped in the storage that makes 53% of the suction volume included in the previous draft tariff.

Being aware that the storage usage motivation of sellers is only commercially driven because there are no compulsory storage duties, the first principal product offered by JSC “Conexus Baltic Grid” to PUC for approval is the market product of variable price. It is planned to revise this price once a week depending on the changes of natural gas in the predicted winter ad summer prices in the Gaspool. 

When preparing the draft tariff and summarizing the interest of Baltic sellers about the storage, it is planned to offer also a standard product of grouped capacity. It will be used by those market participants that use the storage primarily to provide the maximum consumption and for the needs of supply safety.  When compared with the variable price market product, this product will have several advantages – both during the suction season and during the application of virtual flows.

JSC “Conexus Baltic Grid”, when elaborating the new storage tariffs, took into account the interests of those natural gas storage users who think strategically and are long-term clients of the storage. With this tariff a long-term storage product is introduced that is anticipated for two storage cycles. When compared with the standard product of the grouped capacity, a 2% discount is applied to this product and the price is fixed for two storage cycles.

The natural gas storage service tariffs elaborated by JSC “Conexus Baltic Grid” will be binding for all users of Inčukalns underground gas storage.