Inčukalns underground gas storage facility achieves largest storage capacity reservation in history
Natural gas consumption in Latvia has decreased, with 7.2 TWh of natural gas withdrawn from storage in the first six months of this year, which is 40% less than in the same period last year, according to data on the company's performance in the first half of the year compiled by JSC Conexus Baltic Grid (Conexus). At the same time, system users are actively preparing for the winter season, securing and storing natural gas in the Inčukalns Underground Gas Storage (Inčukalns UGS) for the 2022/2023 storage cycle, with the volume of capacity reservation products reaching 24.1 TWh, which is 27% more than a year earlier, fully reserving all available capacity. This is the largest amount of storage capacity bookings achieved in Conexus' history.
Natural gas consumption for Latvian users reached 4.8 TWh in the reporting period, down by a third compared to last year. The decrease in natural gas consumption was due to both higher temperatures in the winter months than in the corresponding period of 2021 and a two-thirds drop in electricity generation at the country's largest thermal power plants. As a result, the demand for natural gas by users was lower than in the corresponding period of the previous year, so the drop in natural gas consumption has allowed a 40% reduction in the volume of natural gas withdrawn from Inčukalns PGK.
In response to the political situation in Europe, the company started Injection natural gas into Inčukalns UGS already at the end of February this year. In fact, natural gas injection into the Inčukalns Underground Gas Storage Facility did not start until after the end of the withdrawal season on 30 April 2022. At the end of the reporting period, on 30 June 2022, 9.7 TWh of natural gas was stored in Inčukalns UGS, while the currently stored volume amounts to 11.8 TWh.
"This is a very different time in the energy sector to what we have seen before. The drop in natural gas consumption in the previous season has played in favour of the volume of stored natural gas, providing a certain springboard for the next withdrawal season. As can be seen, system users are very aware of the challenges ahead. We don't know what the weather will be like, and the geopolitical situation is still extremely unstable and unpredictable, so the only right decision at the moment is to build natural gas stocks," said Uldis Bariss, Chairman of the Board of Conexus Baltic Grid.
In the first six months of 2022, Conexus ensured uninterrupted supply of natural gas to Latvia, Lithuania, Estonia and Finland, and the total volume of natural gas transported in Latvia reached 16.8 TWh, which is 24% less than in the same period of the previous year. The largest decrease was in the volume of natural gas received from Russia. In the first 6 months of this year, natural gas received from Russia amounted to 2.7 TWh, which is a 71% decrease compared to the 9.6 TWh received in the first 6 months of last year.
At the same time, system users are diversifying their sources of natural gas supply in order to ensure reliable and predictable availability of natural gas. System users have actively started deliveries of natural gas from the Klaipeda LNG terminal, with 6.5 TWh of natural gas received from Lithuania in the first 6 months of this year, 13 times more than in the same period last year.
Conexus' turnover also decreased in the reporting period, reaching 27.67 million, while storage services revenues and EBITDA exceeded the same period of the previous year. The storage segment generated revenues of EUR 13.55 million in the reporting period, while EBITDA amounted to EUR 9.4 million.