Conexus: Latvian natural gas infrastructure strengthens energy security for the whole region

In 2021, the single natural gas transmission and storage system operator Conexus Baltic Grid AS (hereinafter - Conexus) supplied natural gas to Latvia, Lithuania, Estonia and Finland, with the total volume of natural gas transported reaching 39.3 TWh, which was 5% more than a year earlier, according to the unaudited financial statements of the company for the previous year. At the same time, Conexus points out that one of the biggest market challenges last year was the sharp rise in energy prices, which further confirmed the role of the Inčukalns underground gas storage facility in ensuring energy security.

Last year, natural gas consumption for Latvian users increased by 8% to 12.5 TWh. The increase in consumption on the Latvian market can be attributed to last year's weather conditions, when Latvia remained on average cooler for a longer period of time. Overall, Latvia's average consumption of natural gas during the heating season has been 8.7 TWh over the past three years.

Last year, the volume of natural gas flows transported for Lithuanian users also increased, increasing 1.8 times to 3 TWh in the reporting period. The increase was observed in the first quarter of the year. Both Latvian consumption and Lithuanian demand for natural gas had a positive impact on the results of Conexus' transmission segment.

The natural gas storage segment also performed well in 2021. At the beginning of the withdrawal season, the storage capacity reached 17.4 TWh, representing 80% of the maximum active natural gas storage capacity. However, the interest of system users in natural gas storage declined due to the significant increase in energy prices. Admittedly, the price increase was one of the biggest challenges in 2021, but despite this, the volume of natural gas stored was higher than in the 2017-2018 storage cycles.

Uldis Bariss, Chairman of the Conexus Management Board, continues: "In describing the past year, I would like to underline that it has demonstrated that Latvia's natural gas infrastructure is of strategic importance to ensure continuity and security of natural gas supply also under changing market conditions not only in Latvia, but also in the nearest neighbouring regions. In 2021 we could see that flexible natural gas supplies under growing demand are possible thanks to the volume of natural gas stored in storage."

Company continues to invest in natural gas infrastructure

Last year, Conexus invested a total of €27.4 million, 55% of which in projects of European interest.

Bariss continues: "Last year, in order to enable the storage facility to operate even more efficiently, we completed a historic project to upgrade the 12z330 No.3 gas pumping unit. This project will now allow the unit to be used for natural gas compression withdrawals during the spring months when less active natural gas is available in storage. The use of the compressor will significantly improve the continuity and security of natural gas supply under high demand conditions, also at the end of the withdrawal season. In 2021, we also started cooperation with other transmission system operators in the region on green gas development, thus also working on future scenarios for natural gas market development."

The results in the transmission and storage segments have enabled Conexus to increase turnover by 5% to €56.4 million in 2021. Transmission segment EBITDA amounted to EUR 18.8 million, while storage segment EBITDA reached EUR 14.8 million.