With a view to establishing a single regional gas market together with Estonia and Finland the Cabinet of Ministers approved amendments to the Energy Law (hereinafter referred to as the Draft Law) at its meeting of 17 September. The draft law is still to be approved by the Saeima.
The Ministry of Economics, in cooperation with the Public Utilities Commission and the natural gas transmission system operator AS “Conexus Baltic Grid”, has drafted a draft law so that the regional gas market with a single system of entry-exit tariffs for Finland, Estonia and Latvia starts to function from 1 January 2020.
“Today the government has taken a significant step towards the creation of the Baltic regional gas market, which is essential for energy independence of Finland, Estonia and Latvia and the national economy as a whole. The creation of the Baltic regional gas market has also been supported by the European Commission, so we hope that Lithuania will also decide to join the single Baltic gas market in the future,” says Ralfs Nemiro, the Minister of Economics.
The creation of a single regional gas market will make it more liquid, will boost competition between natural gas traders, with a corresponding positive impact on gas prices and the national economy as a whole.
The draft law defines the rights and duties of the natural gas transmission system operator, transmission system users, market players and the Public Utilities Commission in the regional gas market.
The Public Utilities Commission is expected to harmonise the rules of use of the single natural gas transmission entry-exit system for the successful creation of a single and functioning regional gas market.
The decision on the creation of a regional market was taken by Prime Ministers of the Baltic States in 2014 and has been set as one of the priorities of the Government Action Plan: Declaration of the Intended Activities of the Cabinet of Ministers Headed by Arturs Krišjānis Kariņš.
On 5 December 2014, the Prime Ministers of Estonia, Latvia and Lithuania adopted a decision on the development of an effectively functioning regional gas market. On 12 February 2015, a Regional Gas Market Coordination Workgroup was set up, consisting of representatives of ministries of the Baltic States and Finland, national regulatory authorities and natural gas infrastructure companies of regional importance. The Regional Natural Gas Market Development Plan developed by this workgroup provides for the establishment of a single natural gas transmission entry-exit system service tariff based on Regulation No 2017/460 of the European Commission.
On 9 December 2016, Prime Ministers of Latvia, Lithuania and Estonia signed a declaration on the creation of a regional natural gas market with a view to creating a single and regional natural gas market of the Baltic States by 2020 in order to promote economic development in the region, providing benefits to all natural gas users, ensuring a competitive price for natural gas and high quality services.