Market participants' interest in Inčukalns UGS exceeds the capacity offered by storage
On 17 March, when reservation was launched for the new injection season 2020./2021. of the Inčukalns underground gas storage (Inčukalns UGS), the booked capacity exceeded the available storage capacity 4.2 times. This indicates the high interest of market participants in the use of storage, informs the single operator of the natural gas transmission and storage system AS “Conexus Baltic Grid” (Conexus).
The volume of applications for the bundled capacity product reached 26.8 TWh, exceeding the available capacity of the available capacity by about 3.9 times available at 6.9 TWh. Meanwhile, bookings for the two-year bundled capacity product reached 10.5 TWh, exceeding the storage's available capacity by about 5.3 times while the storage capacity for that product was available at 2TWh. Today, March 18, Conexus informed market participants about the capacity allocated on pro rata basis, while additional capacity for reservation will be available in the second half of May.
Informs Zane Kotāne, Chairman of Conexus Board: “The amount of storage capacity currently available is relatively small, proportional to the amount currently available in storage. With each new storage cycle, we see traders' interest in storage use is rising. This is also confirmed by the amount reserved for storage capacity at this time. The growing demand is a clear acknowledgment of the need for Inčukalns storage and its strategic role in the functioning and security of Latvian and regional gas supply. In view of the high interest, it is necessary to review the storage capacity reservation rules for the following injection season in a timely manner, by introducing storage capacity auction, in order to provide traders with a more equal capacity to use storage."
Amendments to the rules for use of Inčukalns underground gas storage following a decision of the Public Utilities commission entered into force on 13 March, while according to storage rules, the available capacity for reservation was published on the website of Conexus one day before the reservation was commenced. Storage products were available to market participants for reservation from Tuesday, March 17. Given that storage withdrawal season is currently active, operator was offering the amount of free capacity available for that date.