LNG: Commerce and competition on the rise

LNG: Commerce and competition on the rise

Alessando Geraldini
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Competition in the Baltic states is heating up following the diversification of supplies to Estonia's Eesti Gaas, while global LNG trade in 2016 saw double the growth of the previous three years

Competition in the liquefied natural gas market has been ratcheted up in the Baltic states and eastern Europe thanks to Estonia’s Eesti Gaas, which in spite of a number of logistical priorities is experimenting with various partners for the supply of LNG, switching between Russia, Poland, Lithuania and Finland. “We’ve always said that we want to diversify our LNG suppliers,” said Eesti Gaas CEO Ants Noot, adding that his company sees no significant difference between Polish and Russian LNG. He explained further that “Poland is just further away. Pskov is the main supplier – that is clear. It’s closest to us and the fastest option for us today, and the quality of LNG there is absolutely fine.” Eesti Gaas has in any case declared its willingness to also cut a deal to receive LNG from a Lithuanian reloading station in Klaipeda: “We expect to receive the first deliveries from there in August,” Eesti Gaas general director Marcus Kaasikus told journalists. Lithuania’s energy minister Zygimantas Vaiciunas has stated that liquefied natural gas at the Klaipeda LNG terminal is “competitive” and that the deal between Eesti Gaas and Poland’s Polskie LNG, the Swinoujscie LNG operator, does not give the Poles “more advantages” over Lithuania’s own terminal. “The LNG reloading market is indeed dynamic, and the competition will be tense,” he said, adding the deal was not symptomatic of anything. He said Lithuania would be able to offer competitive prices and services. In the long term, however, Eesti Gaas plans to buy most of its LNG from Pori, in Finland, for logistical reasons. Global trade in liquefied natural gas increased 7.5% (18 million t) in 2016, for a total of 263.6 million t, according to the annual report put out by GIIGNL (the International Group of Liquefied Natural Gas Importers). This figure is especially impressive following three years in which trade of LNG grew by just +0.5% annually. The biggest increases were in China (+8 mln t), Egypt and India (each with +5 mln t).