Lithuania's Energy Ministry prepares natural gas capacity model

Friday, 14 August 2015

Lithuania's Energy Ministry has submitted for public harmonisation draft amendments to the Law on the Liquefied Natural Gas (LNG) Terminal. The amendments foresee consumer-favourable financing of security of gas supply - the so called natural gas capacity model.

According to Energy Minister Rokas Masiulis, the goal is to proportionally distribute the cost for maintenance of natural gas infrastructure and security of supply to all users and consumers of the natural gas system. This will allow to balance out the benefit received by consumers from security of natural gas supply guarantee in the long-term energy perspective.

Based on preliminary calculations, the benefit of the new capacity model would be felt first of all by heat suppliers. Once the capacity model is confirmed, the heat sector would save EUR 5 million in 2016 in payments for sustenance of natural gas supply infrastructure. Moreover, state-regulated heat suppliers would save due to new procedures of acquiring natural gas from the LNG terminal. If the amendments passed, suppliers would purchase gas for the price established by the National Commission for Energy Control and Prices (VKEKK) based on its projection of natural gas price in the market. In turn, this would allow to reduce heat prices to consumers.

It is estimated that heat price in Vilnius could decrease up to 5 percent due to the capacity model. Meanwhile, in some municipalities it could decrease by as much as 15 percent.

The additional gas capacity component will depend on the capacity of gas systems that consumers use in order to ensure their maximum daily natural gas needs. The created natural gas system infrastructure and long-term LNG supply commitments guarantee security of energy supply. Whereas the changes will allow to distribute the cost proportionally to every consumer group, taking into account their maximum daily natural gas needs.

Powered by Elxis - Open Source CMS