Estonia seeks 1TWh of gas to meet winter heating needs: press

The Estonian Stockpiling Agency says it aims to procure 1 TWh of natural gas for the winter heating season, although national gas utility Eesti Gas is skeptical this goal will be reached, ERR reported June 10.

The first procurement round provided just 10% of the required volume, and the agency will have to hold additional tenders. Some 27 gas sellers were invited to bid to supply 1 TWh of gas for the winter season, with Russian suppliers barred. The fact that so few bids were made indicates Estonia could struggle to meet its needs in the tighter gas market.

Margus Kaasik, CEO of Estonia's national gas utility Eesti Gas, warned gas storage centres could be left with insufficient supplies to cope with winter heating demand, saying he was "skeptical" whether future tenders would be successful.

"The market was not willing to pledge that much gas. Sellers are uncertain and tend to sit on gas for themselves and their existing customers to play it safe," Kaasik said.

It comes as Estonia begins development of its first LNG terminal at the port town of Paldiski LNG, the second such facility to be built in the Baltic region.  Paldiski LNG is expected to arrive on stream before the end of this year.

Ando Leppiman, head of the Estonian Stockpiling Agency, said the terminal was Estonia's best hope of replacing Russian gas quantities. 

"The problem is availability. Also, price, as it is insensible to buy gas at prices you cannot really expect the consumer to cover," Leppiman said. "But we cannot describe the situation as catastrophic either. Our task is to procure 1 TWh of gas by year's end or by autumn, and I remain optimistic in terms of achieving that goal."