Gas flows from Lithuania to Latvia collapse

Physical gas flows from Lithuania to Latvia have collapsed since the start of the month, as the region has been hit by a cold snap.

Flows had already started to fall between the first and second half of November, declining to 55 GWh/d on 15-30 November from 86 GWh/d in the first half, but have since fallen much further as temperatures dropped.

Physical flows from Lithuania to Latvia dropped to just 8 GWh/d on 1-7 December, down from an average of 70 GWh/d in November. There were even minor net outflows from Latvia to Lithuania on 1-3 December, suggesting Lithuanian buyers were likely to be withdrawing gas stored in Latvia's Incukalns.

Withdrawals from Incukalns have also stepped up noticeably since the start of December, jumping to 118 GWh/d on 1-6 December, according to the latest available data, well up from net injections of 1 GWh/d in November. Storage operator Conexus Baltic Grid in September enabled physical injections of up to 50 GWh/d to continue through the heating season, something that was previously not possible.

Overnight lows in Lithuania's capital Vilnius on 1-7 December were more than 4°C below the 10-year average, with outright temperatures firmly below freezing, reaching as low as -10.2°C on 3 December. And overnight lows in the Latvian capital of Riga were similarly cold, also holding 4°C below the 10-year average, although outright temperatures were slightly higher, but still well below freezing each night.

This suggests that importers who were bringing in cargoes to Lithuania's 2.9mn t/yr Klaipeda LNG terminal, which provides most of the region's gas supply, are now opting to keep the gas in Lithuania to meet peaking domestic demand, rather than sending it on to Latvia to be stored in Incukalns.

At the same time, Lithuania switched to brisk net exports towards Poland at Santaka, averaging 34 GWh/d on 1-7 December from net imports of 13 GWh/d in November. This could suggest Polish importers are also withdrawing gas previously stored in Incukalns, as Polish gas firm PGNiG has received multiple cargoes at Klaipeda this year, or buying it from others who had stored it there.

By Brendan A'Hearn