Conexus will continue auctions regarding the storage of active natural gas volume
The Unified System Operator of Natural Gas Transmission and Storage JSC Conexus Baltic Grid (Conexus) informs that the charge for the use of exit point for supply of Latvian natural gas users will decrease by 3.7% to 1.9296946 €/MWh. At the same time, Conexus points out that additional auctions for natural gas storage in the Inčukalns underground gas storage facility will continue this year in case of an energy crisis, as the required guaranteed volume has not yet been reached due to high natural gas prices and lower interest from market participants.
The new tariff for the use of the exit point for Latvian natural gas users will take effect from October 1, 2021 until September 30, 2022, thus providing a slight price reduction for end-users in line with the increase in natural gas costs. The tariff level is closely linked to the cost of the auctions and is recalculated annually accordingly.
According to the Cabinet of Ministers' Regulation "Procedures for the Supply of Energy Users and Sale of Heating Fuel During Declared Energy Crisis and in Case of Endangerment to the State", Conexus must ensure that 3 160 000 megawatt hours (MWh) of active natural gas is stored in the Inčukalns underground gas storage from the start of the withdrawal season until March 1, 2022. The bids approved in the auctions held until the end of August 2021 totalled 2 350 000 megawatt-hours (MWh). Therefore, additional auctions will be held for a total of 810,000 megawatt hours (MWh), with Conexus to inform natural gas market participants. It should be underlined that 2 350 000 MWh or 74% of the 3 160 000 MWh of natural gas required is currently secured.
"Natural gas prices have risen across Europe this year and there is currently more demand for natural gas than supply. In addition, the autumn and winter months of this year have seen higher price increases, which has naturally reduced the interest of market participants in auctioning natural gas in storage to secure energy crisis reserves, as this increases the financial risk for any trader this year. However, the continuation of the auctions will allow us to both increase the amount of these guaranteed reserves and allow traders to take advantage of changing market conditions," said Uldis Bariss, Conexus CEO.