Ammonia restart lifts Lithuanian gas demand

Lithuanian producer Achema restarted its second ammonia unit at the Jonava site last week, buoying the country's gas consumption.

The unit — with a gas consumption capacity of 42 GWh/d, according to previous urgent market message postings — came back on line last week, state-run news agency LRT quoted Achema as saying. Achema said it "constantly monitors and assesses the trends in the fertiliser market and adjusts its production volumes accordingly".

Gas consumption in Lithuania increased by more than 30pc last week as a result of the restart, the country's energy agency said on 2 October.

Lithuanian demand had already increased sharply in previous weeks — it was running at 49 GWh/d on 21 September-2 October, up from 35 GWh/d on 1-20 September, according to transmission system operator Amber Grid. This might reflect the end of maintenance at Achema's other Jonava ammonia unit earlier in the month.

Achema had planned to ramp up production in June, but consumption data suggest this did not happen to any great extent.

Ammonia import costs have increased significantly over the past two months, as a series of outages at key exporters reduced supply. Production costs based on TTF front-month prices have been lower than import prices since early September. Argus' most recent weekly assessment put domestic production more than $113/t lower than imports (see production vs import cost graph).

This is the second ammonia producer in the past week to announce a restart in eastern Europe, after Romania's Azomures said it would increase production to 50pc of capacity in October.

Consumption at the Jonava facility was just 3 GWh/d on 1 January-12 February, before Amber Grid stopped publishing this data set (see Jonava consumption graph). Consumption at the facility dropped to 20 GWh/d in 2022 from a fairly tight daily range of 32-40 GWh/d in 2015-21, and held in the low single-digits for several months last year as gas prices soared to record highs.

Jonava accounted for 55pc of Lithuanian gas consumption in March 2018-December 2021 — the only available data before significant curtailments began. Achema consumed 49TWh in this period , while Lithuanian consumption as a whole was just under 90TWh.

By Brendan A'Hearn

Jonava daily consumption 2015-Feb 2023 GWh/d

Ammonia production vs import cost USD/t