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Low gas price has increased demand for services of Incukalns storage facility - Conexus

BC, Riga, 28.08.2019.Print version
As the price of natural gas has dropped to the lowest point in five years, demand for storing gas at the Incukalns underground gas storage facility has significantly increased in recent months, Zane Kotane, CEO of the Latvian gas transmission and storage operator Conexus Baltic Grid (Conexus), told LETA.

It was announced recently that all gas storage capacities at the Incukalns facility have been booked already and new bookings are not being accepted anymore. Kotane noted that interest in the underground gas storage facility has surged this year.

“The main reason is the price of natural gas, which currently is the lowest in the past five years. Traders are therefore interested in buying gas to sell it at a higher price in winter. Natural gas is a global commodity and its price has dropped because of a weaker than expected demand in Asia. Another reason is significantly increased deliveries of liquefied natural gas (LNG) from America. The number of regasification terminals is growing and shipping of LNG by sea is on the rise as well. Once there is no demand in Asia, the ships come to Europe. The has price is therefore low in all Europe. At the beginning of August, gas storage facilities in Europe had received 20 percent more gas than a year ago. The same goes for Latvia,” said Conexus CEO.

She indicated that Conexus surveys market participants about their interest in using the gas storage facility at the beginning of each season. At the beginning of this season, there were no indication of increased demand, but bookings started to grow fast at the beginning of July. “This is why we stopped accepting new bookings at one moment in order not to sell clients something we cannot provide later,” said Kotane.

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