Energy, EU – Baltic States, Gas, Gas Market , Good for Business, Latvia

Allocation of transmission capacity will happen by means of implicit, or indirect auction, just like it happens on the electricity market now, Elering said.

"Our vision is to have a common gas market of the Baltic countries and Finland, where it will be equally simple for a seller in Estonia to sell gas to consumers in Estonia, Finland and Latvia," Elering CEO Taavi Veskimagi said.

The allocation of transmission capacity will be handled by the Lithuanian gas exchange operator UAB GET Baltic, which won a tender held by the transmission system operators.

The new model of allocation of transmission capacity will make trading in natural gas more effective, reduce costs for market participants, help integrate the markets, and increase liquidity and competition.

Simultaneously with the implementation of the new model of transmission capacity allocation a joint platform for trading in natural gas will launch in Estonia and Latvia and GET Baltic, which has been operating exclusively in Lithuania so far, will become a regional gas exchange. The new trading system will be implemented within a period of three months.

Under the present arrangement, a market participant who buys gas in another country must conclude in addition to the purchase and sale agreement an agreement with the system operators on the transportation of gas.